CULPEPER STAR-EXPONENT, CLINT SCHEMMER

As coronavirus relief loans to small businesses dried up, U.S. Rep. Abigail Spanberger urged lawmakers and administration officials Thursday to refresh the Small Business Administration’s programs to rescue business owners.

The SBA closed applications for its Paycheck Protection and Economic Injury Disaster Loan programs Thursday morning. Demand exhausted $350 billion in federal funding for its PPP loans, designed to avert layoffs, and $10 billion in disaster loans.

Any movement by Congress will have to wait until next week when the Senate and House reconvene. The Trump administration continue negotiating with Democrats on a deal that could pass Congress unanimously, but Senate Majority Leader Mitch McConnell (R-KY) said Thursday that there’s been “absolutely no progress.”

“There is no question that the SBA’s PPP and EIDL programs need more funding now, and this process cannot be mired by political gamesmanship, partisan attacks, and federal bureaucracy,” Spanberger said Thursday.

“The federal government can’t turn its back on the hard-working men and women who power our local economies. And when this funding goes through, the administration must be more efficient in distributing these loans to the business owners who need them.”

Both political parties must collaborate to restock the SBA’s emergency programs, and more money for states and localities to respond to the public health emergency, she said.

The coronavirus crisis has jeopardized thousands of private entrepreneurs’ hard-earned dreams, Spanberger said.

“Family businesses are struggling to make payroll, and workers are trying to make ends meet under intense circumstances,” she said.

Also Thursday, as Congress negotiates the next COVID-19 relief package, Spanberger led a bipartisan clutch of colleagues to urge House leaders to cut red tape for small businesses seeking federal loans during the coronavirus pandemic.

Many small business owners have criticized the rollout of the U.S. Small Business Administration’s Paycheck Protection Program as being too cumbersome and slow.

Spanberger led other 11 House members Thursday in urging Speaker Nancy Pelosi and Minority Leader Kevin McCarthy to swiftly push for killing the paycheck program’s restrictions on non-payroll loan forgiveness for small businesses seeking PPP loans.

The lawmakers, spearheaded by Spanberger (D-VA-07), Brian Fitzpatrick (R-PA-01) and Josh Gottheimer (D-NJ-05), asked that the change be made as the House drafts the next round of COVID-19 emergency legislation.

Their letter to Pelosi and McCarthy was also signed by Reps. Dean Phillips (D-MN-03), Anthony Gonzalez (R-OH-16), Max Rose (D-NY-11), Kendra S. Horn (D-OK-05), Jaime Herrera Beutler (R-WA-03), Elissa Slotkin (D-MI-08), Vicente Gonzalez (D-TX-15), Darren Soto (D-FL-09), and Xochitl Torres Small (D-NM-02).

Just before it launched the paycheck program earlier this month, the SBA issued guidance that severely curtails loan forgiveness and requires businesses to spend 75 percent of a PPP loan on maintaining payroll. Congress did not make such a stipulation when it passed the Coronavirus, Aid, Relief and Economic Security (CARES) Act, the lawmakers noted.

The SBA guidance hamstrings business owners, especially those with high rent or utility costs, if they try to adapt loans to challenges faced by their individual businesses, the legislators told the House leaders.

“We must address the negative implications for a borrower’s loan forgiveness that arise if a small business tries but is unable to rehire employees due to the economic and public health uncertainty surrounding the current crisis,” Spanberger and her colleagues wrote McCarthy and Pelosi.

Under the SBA rules, many small businesses that can’t rehire employees by June 30, 2020, could see cuts in how much the U.S. government would forgive a loan problem, they said. That flies in the face of what Congress intended in creating the program through the CARES Act, the legislators said.

For many a small business, the SBA’s added stipulations could spell the difference between reopening or permanently closing its doors, they warned.

“Many small businesses are concerned that, due to the extenuating factors surrounding the pandemic—including ongoing state and local stay-at-home orders—they may not be able to meet the June 30 deadline,” the House members wrote. “… These small businesses require direction on how to navigate this aspect of the PPP loans, without sacrificing their loan forgiveness.”

Last week, Spanberger led a bipartisan effort urging the SBA and the Treasury Department to make the loan programs more flexible about non-payroll costs.

Since SBA launched the paycheck loan program, Spanberger has been fighting for Central Virginia’s small businesses to get the emergency funding they need to weather the crisis.