Citing Concerns for Lowcountry Small Businesses and Workers, Cunningham Calls for Clarity to Paycheck Protection Program

Demands Treasury Department and Small Business Administration Offer More Guidance to Lenders to Ensure Small Businesses Have Access to Lending Program

Mt. Pleasant, S.C. – Rep. Joe Cunningham today continued his fight for small businesses and workers, joining a group of lawmakers to urge Treasury Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza to provide additional guidance to Paycheck Protection Program (PPP) lenders that would clarify eligibility requirements and encourage lenders to provide PPP loans to all eligible businesses.

On March 27, 2020, The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law to respond to the economic effects of the coronavirus pandemic. The bipartisan legislation provides significant assistance to small businesses, including $349 billion for SBA to administer the Paycheck Protection Program. The program provides cash-flow assistance for businesses under 500 employees through 100 percent federally guaranteed loans to small businesses to maintain their payroll and pay their bills during this emergency. So far, the guidance from the Treasury Department and SBA has been inadequate and confusing, so many small businesses are having difficulty accessing funding from lenders who are unclear how to proceed with the loans.

“We were shocked and disappointed to learn that, contrary to Congressional intent, individual qualified lenders have been demanding additional requirements of businesses that wish to apply for a loan, including an existing Small Business relationship between the lender and the business,” the lawmakers wrote. “We ask that the SBA and the Department of Treasury provide additional guidance to PPP lenders that would clarify eligibility requirements and encourage lenders to provide PPP loans to all eligible businesses.”

Full text of the letter can be found online and below.

Dear Administrator Carranza and Secretary Mnuchin:

We write to urge your immediate attention and swift action on an issue that threatens the financial security and longevity of small businesses. 

On March 27, the House passed the CARES Act (PL 116-136), which was shortly thereafter signed into law, to respond to the economic effects of the coronavirus pandemic. As the public health measures necessary to slow the spread of coronavirus are taking a particular toll on small businesses, the CARES Act provides significant assistance to small businesses that might otherwise not be able to survive the impact, including through the Paycheck Protection Program (PPP).

The PPP, found in Section 1102 of the CARES Act, is a $349 billion loan program—managed by private sector lenders but guaranteed by the government—to help small businesses keep afloat during a time of social distancing and mandatory business closures. As a resource for small businesses, sole proprietors, contractors, and the self-employed, PPP loans are meant to be available for small businesses, defined as having fewer than 500 employees, that have suffered economic hardship as a result of COVID-19.

Accordingly, we were shocked and disappointed to learn that, contrary to Congressional intent, individual qualified lenders have been demanding additional requirements of businesses that wish to apply for a loan, including an existing Small Business relationship between the lender and the business. We ask that the SBA and the Department of Treasury provide additional guidance to PPP lenders that would clarify eligibility requirements and encourage lenders to provide PPP loans to all eligible businesses.

Thank you for your attention to this critical matter and for your work to address the economic impacts of this pandemic. Your swift action on this issue will help alleviate the concerns of our nation’s small businesses, which are vital to our country and our communities.