On April 14, ABC sent an action alert to ABC members asking them to call on their members of Congress to quickly authorize additional funding for the Paycheck Protection Program, which was created under the CARES Act to provide forgivable loans to small businesses. With nearly $350 billion in small business aid estimated to run out this week, ABC is asking Congress to pass a clean bill to increase funds for the PPP, which has been a priority for Senate Majority Leader Mitch McConnell and the White House.
In most instances, ABC members have been successful when seeking PPP loans. According to an SBA report on the Paycheck Protection Program, the construction industry accounts for the highest percentage of approved loans and dollars relative to the other NAICS listed. Through April 13, 2020, the SBA has guaranteed 1,035,086 loans worth more than $247 billion under the PPP, with nearly 115,000 loans worth close to $34 billion coming from the construction industry alone.
The construction industry’s successful participation in the PPP program can be attributed to several factors, including the relatively high percentage of construction firms that are designated as eligible for PPP loans. The PPP’s exclusive focus on small businesses that employ less than 500 employees provides a potential source of aid to the 99.8% of construction firms who meet that criteria, according to the SBA.
Despite this relative success, in a letter sent to House and Senate leadership on April 8, ABC advocated for several important modifications to the PPP loan program. Currently, the CARES Act allows for some nonprofits to apply for the PPP, but excludes 501(c)(6) organizations, such as national, state and local associations, from accessing these loans. ABC urged Congress to modify the bill to allow 501(c)(6) organizations, such as ABC chapters, to benefit from PPP loans.
Additionally, ABC has voiced concern over the current PPP loan formula, which provides 2.5 times the average monthly payroll for small businesses and only eight weeks of payroll coverage. ABC is supportive of efforts to provide four months of payroll coverage under a broader formula.
Most importantly, ABC believes that additional PPP funding is needed immediately to effectively keep small businesses intact and employees on payroll. ABC also urges Congress to consider the suggested improvements to the PPP in any subsequent COVID-19-related legislative packages, as its inclusion will ensure that more Americans remain employed during the national health crisis and small businesses have the resources to lead the economic comeback once the crisis is over.
ABC will continue to provide updates on the developments of the PPP loan program in Newsline.