Daily Business Blog – April 22, 2020
In order to keep you informed on the evolving impact of COVID-19 on our local community, the Plano Chamber will be publishing updates every weekday as the Daily Business Bulletin. We will share the top news items that you need to read to stay up-to-date on important health, community, and business issues as they develop.
April 22, 2020
Follow up to last week’s Collin County Chamber of Commerce with U.S. Senator Cornyn and the Small Business Administration (SBA). Below you will find the answers provided by U.S. Senator Cornyn’s team to the questions asked during the call.
Q: The CARES Act is obviously designed to keep people off of unemployment but small business owners also need relief with their fixed costs such as rent, utilities and insurance since only 25% of the PPP loan can be used for these things and still be forgiven. Are there any plans to help the small business owner, in particular those with lower payroll to total cost ratios?
A: Senator Cornyn has heard from several industry sectors concerned about the 25/75 split to qualify for forgiveness. Senator Cornyn has raised this issue with the small business committee and the administration asking that logical flexibility be provided for industries with low payroll expenses.
Q: With the CARES Act being the largest stimulus package in history, what will this do to our overall national debt in the long term?
If the next stimulus package is meant to fill holes and address gaps in areas that were left out of the CARES Act, how do businesses and owners that feel like they have some overlooked issues provide input in this next bill? What’s the timeline for it and when do you think it might pass?
A: Senator Cornyn is advocating for all businesses who have a legitimate need and have been unable to access assistance. Please continue to communicate your needs with my staff who have a constant line of communication with the Small Business Committee and the Administration.
Q: What are your thoughts on a timeline for the development of a vaccine and effective treatments? There’s been a lot of talk that until we have a vaccine, our normal won’t be the same as it was before. Is there more we can be doing to expedite the development of these drugs and vaccines?
A: Congress has approved $2.5 billion towards researching and developing vaccines and treatments for COVID-19. The National Institutes of Health have begun funding studies and trials, BARDA has entered into partnerships with vaccine manufacturers to speed development, and US Army researchers are working with manufacturers to speed up development.
Q: States on the West and East coast are banding together to form regional plans to reopen their economies. Do you anticipate Texas doing something similar with our neighboring states?
A: Last week, Governor Abbott announced the plan to reopen Texas. The Governor outlined the criteria for determining which locations could begin the process of reopening and intends to follow up on the announcement on Monday, April 27th.
Q: Could the Senator please address the thinking behind maintaining the SBA affiliation rules that are preventing small businesses that have raised money from investors that own other companies from taking advantage of the Paycheck Protection Program SBA loans under the CARES Act? What efforts are underway to relax these rules and provide access to this much-needed assistance for small businesses?
A: The affiliation rules are in place to ensure funds are accessible for mom and pop shops without investors or corporate affiliates who can help keep business doors open. PPP funds ran out in less than two weeks, demonstrating just how limited funding is. That being said, we know all business models are unique, and I am committed to providing relief to all small businesses who have a legitimate need for assistance.
Q: What is the effective day to count the 8 weeks payroll to compare with the 75% of receipts of the PPP loan?
A: That depends on when you receive your loan. After the 8 weeks, starting on the day you receive the loan, you will need to go to your bank to apply for forgiveness. At that time you will need to demonstrate your expenses met the forgiveness requirements of the program.
Q: Can you please advise if the SBA is considering any modifications to current size standards or extending renewal periods to help firms such as our weather this current coronavirus pandemic? Many businesses with impending certification renewal dates who may have had a banner year in 2019 (which may push them outside the SBA size limits) are facing a significant decrease in business in 2020. A temporary raising of size standards or renewal extension would help a lot of us who imminently face losing our small business status only to fall below the limits next year.
A: The Secretary of Treasury and SBA Administrator have de minimus authority to make changes to certain aspects of the program. I would encourage you to reach out to your local SBA office to determine if your business is or may soon be eligible.
