Letter to Congressional Leaders on Fixes and Reforms to PPP and EIDL

By at 17 July, 2020, 2:49 pm

The Honorable Nancy Pelosi                               The Honorable Mitch McConnell

Speaker of the U.S. House                                   Majority Leader

U.S. House of Representatives                           U.S. Senate

United States Capitol                                           United States Capitol

Washington, D.C. 20515                                    Washington, D.C. 20515


Dear Speaker Pelosi and Majority Leader McConnell:

On behalf of the Small Business & Entrepreneurship Council (SBE Council) and our more than 100,000 entrepreneur-members and network partners nationwide, I thank you for your work to advance initiatives in support of America’s small businesses and their hard-working employees during the COVID-19 crises. As you well know, conditions remain very precarious for small businesses and they continue to need support to navigate and ride out the economic effects triggered by the pandemic.

According to a State of Small Business Report recently published by the Small Business Roundtable (of which SBE Council is a member) and Facebook, the two biggest concerns of small business owners are “demand” and “access to capital.” Our members are operating smart and safely during the re-openings. They are doing what they can to innovate and pivot to new models and markets in order to drive revenues. With significant uncertainty regarding when COVID-19 will be behind us and how fast the economy will recover, it is obvious that small businesses across sectors and of various sizes continue to need help. Here are some key actions that are needed to help as many small businesses as possible stay intact during this very difficult period:

PPP Loans – Broad Usage and More Flexibility: The Paycheck Protection Program (PPP) helped many small businesses, but millions of small businesses cannot access or take advantage of the program due to restrictive rules on what the loans can be used for with regard to forgiveness and the limited period of time the capital can be used for forgiveness. In addition, the complex and changing guidance was very hard for the smallest of small businesses to follow and understand. The PPP program will be much more effective for different types of small businesses (those in high-cost areas, those without big payrolls but high fixed overhead expenses, and those that are only “re-opening”) if loan recipients could use the funds based on the timing that makes sense for their businesses (up until at least December 31st, 2020), as driven by demand and local re-opening phases, and for a variety of purposes that aid in their re-opening and/or remote operation if needed.

For example, we believe costs associated with the re-opening of a small business and those associated with operating remotely and safely, including PPE and cloud services costs, should be forgivable under the next iteration of PPP and for current loan recipients. According to a recent SBE Council Technology Survey, 84% of small business owners report that cloud services are essential tools when it comes to operating their business during COVID-19, and 74% of small business respondents agree that their core business offering would be unable to operate without the use of cloud services. A significant number of these businesses have upped their use of technology platforms – these tools are essential, and should be treated as such under PPP. We ask that these expenses be forgivable, and 87% of small businesses support this action.

In general, the allowable use of PPP loan funds should be broad and flexible, as no business is the same and they are operating under various re-opening stages. Some have been forced to shut down again. Costs associated with PPE equipment and tools, signage and communications to customers regarding COVID-19 awareness and shopping safely, and cloud services, among other expenses need to be forgivable under PPP.  SBE Council also supports proposals that allocate a portion of the funds for very small businesses (less than 10 employees) and a simplified process for these small businesses and the self-employed to apply for loans and loan forgiveness.  Guidance needs to be established at the very beginning of the program. Loan terms need to be generous.

EIDL Loans – Fix and Re-Boot:  Again, while SBA’s Economic Injury Disaster Loans (EIDL) helped many small businesses, great frustration was experienced by innumerable others. Communication and responsiveness by the SBA improved over time, but fundamental flaws with the program continue to exist. For example, an arbitrary $150,000 loan cap established by SBA was not in the legislation passed by Congress (it was $2 million) and small business owners were confused and surprised by loan approvals of much lower amounts than what they applied for.

The arbitrary $150,000 cap needs to be removed. The program was meant to be a “longer-term” recovery support program for small businesses, not a PPP-style rescue program. SBA’s intention may have been to help more small businesses by divvying up a pot of money into smaller amounts, but this ended up hurting many small businesses that could have weathered the COVID-19 shutdowns if they had the appropriate resources they applied and were eligible for.

Small business owners who received a smaller loan than what they are eligible for should be made whole by the SBA. That is, those receiving EIDL loans of a much smaller size than what they applied for should be allowed to re-apply and obtain the funding they are eligible for. Similar to PPP, the SBA needs to announce how much is left in the overall fund, and Congress should replenish the fund with, at a minimum, an additional $25 billion.

Legal Safe Harbor for Small Businesses: As noted above, SBE Council members are taking every possible precaution to protect their workers and customers from contracting or spreading COVID-19. They are spending significant resources to do so and work every day to keep their businesses and customers safe. Small business owners are rightly concerned about the threat of legal action against their business. These businesses do not seek immunity from litigation, but rather a safe harbor that protects businesses when appropriate standards of care have been met to reduce COVID-19 exposure and spread. Providing local businesses with protection against opportunistic litigation should and must be a bipartisan priority.

SBE Council has joined various coalition letters directed to the both of you in support of other initiatives to support small businesses during this unprecedented period of time. We look forward to working with you on innovative solutions moving forward, as we believe there will be a continuous need for creative ideas that help our nation’s entrepreneurs and small businesses weather the recovery, and thrive in the future.


Karen Kerrigan, President & CEO


The Honorable Marco Rubio


Committee on Small Business and Entrepreneurship

United States Senate


The Honorable Ben Cardin

Ranking Member

Committee on Small Business and Entrepreneurship

United States Senate


The Honorable Nydia Velazquez


Committee on Small Business

United States House of Representatives


The Honorable Steve Chabot

Ranking Member

Committee on Small Business

United States House of Representatives


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