Nearly $500B Fed Funding for Small Biz Passes Senate, But Reed Warns Critical Protection Missing

Nearly $500B Fed Funding for Small Biz Passes Senate, But Reed Warns Critical Protection Missing

On Tuesday, the U.S. Senate approved nearly $500 billion in an interim coronavirus relief package, known as ‘COVID 3.5” -- legislation that will provide additional funding for small businesses.

But the legislation does not specifically correct the abuse that took place in the first round of funding in which restaurant chains like Ruth Chris scored $20 million of relief money that was intended for small businesses. Many Rhode Island small businesses receive zero in relief funding.

“Senator Reed and other Democrats sought to include fixes, reforms, and enhancements, but Republicans refused to budge and did not allow common-sense changes that could have helped small businesses, protected taxpayers, and prevented recurring problems. Senator Reed will continue pressing for improvements in the next round of funding,” said Reed’s spokesman in an email to GoLocal.

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The legislation provides additional funding for the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan program (EIDL) to help small businesses, and it provides a major boost for hospitals and health care providers, as well as injecting needed funds for more COVID-19 testing capacity.

Reed supported the package, which was unanimously approved by the full U.S. Senate, and is urging the U.S. House of Representatives to approve it unanimously without delay.

Reed says that while this half-trillion-dollar package is significant, it fails to include needed legislative fixes that would help real small businesses.  Reed noted that while big chains with 400-plus stores were swiftly approved for ‘small business’ assistance under PPP, thousands of local Main Street mom-and-pop shops were completely shut out even when they had a banking relationship and had their paperwork all set.

“Rhode Island small businesses are rightfully upset with how PPP has worked thus far.  I haven’t had many folks tell me it has worked well for them.  That’s why it’s imperative that Republicans get on board with fixing PPP’s very real shortcomings.  Helping genuine Main Street businesses should be something that both parties can support, but the Republicans seem dead set against reforms right now.  We’ve added some new pots of funding for smaller communities, grants for mom and pop businesses as well as women and minority-owned small businesses, but we need to do more to fix the underlying programs," he said. 

The Package Includes:

• $310 billion in additional assistance to small businesses through the Paycheck Protection Plan, with $60 billion channeled through community-based financial institutions that serve minority-owned, women-owned, and veteran-owned small businesses in communities across the country, and improvements to ensure all eligible small businesses can access this critical funding and are not turned away by financial institutions;

According to the SBA, over $1.2 billion in federal Paycheck Protection Program funding has been approved for 6,100 Rhode Island businesses, although the agency refuses to say how much cash has actually gone out the door and many businesses continue to report that they have yet to receive the funding they were approved for. 

• $75 billion for health care providers such as hospitals, community health centers, and nursing homes, providing desperately needed resources to the frontlines of this crisis

• $50 billion for Economic Injury Disaster Loans and grants and $10 billion for grants of up to $10,000 each that disaster loan recipients can obtain.

• $25 billion to help boost COVID-19 testing. 

Reed is calling for Congress to accelerate work on the next comprehensive coronavirus rescue package. 

“What America needs right now is responsible, principled leadership and a functioning government.  Americans are banking on their elected officials coming together to do the right thing and put the nation’s best interest above their own.  This interim package provides a needed measure of certainty in uncertain times and hopefully helps more worthy borrowers across Rhode Island to save their small businesses.  Congress must also enact legislative fixes and provide stronger oversight to ensure these programs are working as intended,” said Senator Reed.  “Americans clearly need more coronavirus help from Congress, and the Administration must do a better job of getting the money into the hands of those who need it.  The Trump Administration’s missteps and changing rules have taken a big bite out of small businesses’ ability to keep people employed.  This interim agreement replenishes funds, but the Trump Administration has to do a better job of execution and actually help small businesses.”