A proposal of $380 billion in funding for small-business forgiveness loans passed in the U.S. Senate late Tuesday and the House of Representatives on Thursday as part of a bill meant to tide over small businesses until the next economic relief package is introduced by Congress.
It is a much-needed source of survival for many small businesses scattered throughout the Four Corners, after initial funding for the Paycheck Protection Program ran out last week. But Senate lawmakers have spent considerable time this week negotiating what the final bill would look like.
Small-business owners like Alayna Mathews, owner of Lemon Head Hair Salon in Durango, don’t have time to wait for senators to bicker over details.
“I’m on my last reserves,” Mathews told The Durango Herald in a phone interview.
She has yet to receive funding through the Paycheck Protection Program. And the provisions under the forgiveness loan program put businesses like hers at odds with the reality that things will not go back to normal once shops open their doors.
“I have employees that are not willing to work because they are scared,” Mathews said. Public health officials are concerned it is too soon to open places like salons, gyms and restaurants, as the number of COVID-19 cases could resurge.
But to be debt-free from the Paycheck Protection Program, small businesses must maintain the same number of employees they had when they applied for the loan. And Mathews lost three stylists and three receptionists after her salon closed for the pandemic.
Colorado Gov. Jared Polis is allowing salons to reopen as soon as Monday, but some plan to wait until early May.
“I don’t know how safe I feel,” Mathews said.
Kris Oyler, co-founder and CEO of Peak Food & Beverage, has been more fortunate. His company received funding from the Paycheck Protection Program on April 10. But Oyler acknowledged his administrative-heavy business has a CFO and other resources that other mom and pop restaurants may not have.
“As soon as we could apply, we applied, and we did get 2½ times our monthly payroll,” Oyler said.
Peak Food & Beverage has hired back 54 employees as of Wednesday, but “we won’t be back up to 300 anytime soon,” Oyler said.
“We have about 150 employees to get back, in order to get loan forgiveness, and that is my biggest concern at this point,” Oyler said.
Polis has extended restaurant closures in Colorado until mid-May, and once restaurants are able to open, they will have to leave greater amounts of space between tables, reducing their capacity levels.
“That’s going to make it hard for us to hire back all 150 full-time employees,” Oyler said in a phone interview.
Small-businesses owners like Oyler want Congress to extend the forgiveness loan date to allow them to rebuild their revenue, given that customers are likely to be wary of frequenting restaurants again and some social-distancing measures will be in place for quite some time to protect public health.
“We don’t feel like it’s fair if we have to take out a bunch of debt because the government is telling us that we cannot reopen fully and be able to hire all of those people,” Oyler said.
Sen. Cory Gardner, R-Colo., told the Herald that while there may need to be extensions to the program, the goal is to keep workers or get workers back on payroll.
What else is in the new bill?Senate Democrats like Sen. Michael Bennet, D-Colo., were successful in adding $75 billion in funding for hospitals, including $225 million for rural health clinics, which are experiencing severe revenue shortfalls.
Workers are anxious to restart the economy after a monthlong stay-at-home order, and the bill creates $25 billion in funding for COVID-19 testing infrastructure. State health officials have said the ability to test and trace the virus is crucial to fully reopen the economy.
The total funding amount for small businesses, hospitals and testing included in the bill adds up to $480 billion in support from Congress to counter the effects of COVID-19.
Despite the gains made in the new bill, Bennet said he is disappointed it doesn’t give governors and mayors the ability to allocate funding where they deem necessary as they confront the widening economic fallout in their cities and states.
“Although I supported today’s bill, this can’t be the end of our work,” Bennet said in a news release.
Emily Hayes is a graduate student at American University in Washington, D.C., and an intern for The Journal.