Looking Toward Next Coronavirus Package, Rosen, Cortez Masto, Lee Lead Bicameral Letters to Provide Nevada Small Businesses Increased Access to SBA Loans
WASHINGTON, D.C. – Today, U.S. Senators Jacky Rosen (D-NV) and Catherine Cortez Masto (D-NV), alongside Rep. Susie Lee (D-NV), announced they have led a group of 13 of their House and Senate colleagues in bicameral letters to the Chairman and Ranking Member of the Senate Committee on Small Business & Entrepreneurship and the Chairwoman and Ranking Member of the House Committee on Small Business requesting that they take steps to explicitly ensure that all legally-operating small businesses and non-profit organizations allowed to access the Paycheck Protection Program (PPP) under the CARES Act can actually obtain these loans. The members specifically called on the committees to prohibit the Small Business Administration (SBA) from directly or indirectly barring small businesses from the program or future COVID-19 relief programs solely because of their involvement in a particular industry, their lack of history of a lending relationship with a particular financial institution, or any other arbitrary criteria that would limit access to capital.
“While much more work needs to be done to add to this important legislation, including additional funding for our small businesses and more direct support for workers, the Administration’s implementation of the CARES Act unfortunately has limited the law’s potential effectiveness. In particular, the Paycheck Protection Program, designed to provide loans to small businesses who need to meet payroll obligations and want to keep workers employed, has been plagued with challenges. Too many of these errors have been unforced, with the U.S. Small Business Administration and the U.S. Treasury Department either willfully ignoring Congressional intent or taking extreme license with the authority provided by the CARES Act. In doing so, countless small businesses and non-profit organizations have been shut out of PPP,” wrote the Members.
“With this in mind, we ask you to take steps to explicitly ensure that all legally-operating small businesses and non-profit organizations who Congress has permitted to access COVID-19 small business relief have full access to PPP, EIDL, and any other COVID-19 small business relief programs by prohibiting SBA from directly or indirectly barring businesses from participating in the program solely because of their involvement in a particular industry, their lack of history of a lending relationship with a particular financial institution, or any other arbitrary criteria that would limit access to capital,” concluded the Members.
Read the full text of the Senate letter here.
Read the full text of the House letter here.
BACKGROUND: In addition to Senators Rosen and Cortez Masto, signatories of the Senate letter include Senators Richard Blumenthal (D-CT), Michael Bennet (D-CO), Doug Jones (D-AL), and Gary Peters (D-MI). Signatories to Rep. Lee’s House letter include Reps. Mark Amodei (R-NV), Troy Balderson (R-OH), Gilbert Cisneros (D-CA), Sheila Jackson Lee (D-TX), Ruben Gallego (D-AZ), Raul Grijalva (D-AZ), Henry Cuellar (D-TX), Mike Thompson (D-CA), and Tom Cole (R-OK)
While small businesses in the gaming industry support more than 350,000 jobs in the United States, guidance released by the U.S. Small Business Administration and the U.S. Department of Treasury several weeks ago excluded any small business that derives more than one-third of their revenue from legal gaming activities from participation in PPP. This is despite the fact that, in Section 1102 of the CARES Act, the legislation explicitly states that “in addition to small business concerns, any business concern, nonprofit organization, veterans organization, or Tribal business concern described in section 31(b)(2)(C) shall be eligible to receive a covered loan” if the business has 500 or fewer employees. SBA’s incorrect interpretation of this clear line of statutory text has cut out not only commercial gaming businesses, hotel casinos, and Tribal gaming operations, but also restaurants, bars, grocery stores, and convenience stores that operate gaming equipment and derive revenue from it, along with gaming manufacturers and related businesses. After hearing from Members of Congress from states with legal gaming, SBA amended its guidance last week to raise the exclusion threshold to those entities deriving more than half of their revenue from gaming, with a $1 million overall cap on annual gaming revenue. While this was a very small step in the right direction, all small businesses should have access to CARES Act loan programs.
Last week, the Nevada delegation announced the future introduction of bipartisan, bicameral legislation with Senator Cortez Masto and Senator Michael Bennet (D-CO) to allow legal gaming small businesses full access to SBA loan and grant programs created by the CARES Act and prior coronavirus relief legislation.
On April 8, Rosen and Lee led Nevada’s Congressional delegation in a bipartisan letter urging Congressional leadership to include gaming small businesses in Nevada and across the country in the U.S. Small Business Administration’s Paycheck Protection Program (PPP)
The entire Nevada Congressional delegation voted in support of the bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act.