SALT LAKE CITY — Congress signed off on $484 billion in further COVID-19 emergency relief measures Thursday afternoon, including $310 billion slated for a small business loan program that tapped out initial funding less than two weeks after launch and left 18,000 Utah business owners waiting in a queue for help.
And while the $2.2 trillion federal stimulus package approved in late March by federal lawmakers included $349 billion for the small business-focused Paycheck Protection Program, demand far outstripped supply as millions of stalled U.S. companies sought help to keep employees paid and businesses afloat.
The new package, which the U.S. Senate cleared on Tuesday, also included $60 billion for the Economic Injury Disaster Loans and Grants program, $75 billion for U.S. health care providers and $25 billion earmarked for expanded COVID-19 testing efforts.
Utah’s sole House Democrat, Rep. Ben McAdams, spoke in favor of the bill in the sparsely occupied chamber before a vote that ran for an hour and a half due to social distancing measures. The final tally came in at 388 yays to five nays, with one member, Rep. Justin Amash, I-Mich., voting “present.”
The bearded McAdams is recently recovered from his own bout with the COVID-19 infection, including over a week in the hospital, and said after the vote that the new funding would provide critical help for Utah employers, employees and their families.
“Utah families are suffering severe economic hardship as a result of our necessary response to halt the spread of COVID-19,” McAdams said in a statement. “They worry about how they are going to pay their bills and financially survive this crisis. (The Paycheck Protection Program) and the Economic Injury Disaster Loans help us maintain a floor under Utah’s small businesses and their hard-working employees as we transition to safely reopening.”
Rep. Chris Stewart, R-Utah, supported the effort but noted his concerns that relief funding was contributing to mounting national debt and called for additional action to address spending issues.
“This additional rescue package is critical to our future, but it comes at a hefty cost,” Stewart said in a statement. “I recognize the dire need for assistance, given the unprecedented circumstances surrounding this pandemic, but the scope of this economic relief is truly frightening.
“Congress must immediately act to address our debt and spending. I call on my colleagues to join with me in tackling this most pressing issue.”
Ahead of Thursday’s vote, Republican Rep. John Curtis, a former small-business owner, said his Utah district is rife with businesses badly in need of the assistance the new funding will help provide
“Small businesses are the backbone of the Utah economy,” Curtis said in a statement. “As a matter of fact, they make up 90% of the businesses in my district. As a former small-business owner, I have a soft spot in my heart for these courageous entrepreneurs who make constant sacrifices in order to grow our businesses and our economy.
“Businesses throughout my community need more help, and now. This bill ... is critical to delivering resources to the parts of the country and economy that are currently on life support.”
Just how far the additional funding approved on Thursday will go to help Utah businesses remains to be seen, however.
According to the U.S. Small Business Administration that is overseeing the Paycheck Protection funding, some 21,000 Utah businesses secured just over $3.6 billion in loans from the first round of the program. But, 18,000 Utah businesses that completed the application process were left hanging as funding dried up late last week.
State banking leaders said those businesses are collectively seeking about $2 billion in emergency funding through the program, which guarantees loans to eligible small businesses from local lenders in amounts up to $10 million and may be partially forgivable. The available financing can provide businesses that employ 500 or fewer with funds equal to 2.5 times the company’s average monthly payroll expenses.
The state’s COVID-19 Economic Response Task Force has been helping Utah businesses connect with assistance programs being offered at the state and federal levels. Task Force chairman and Salt Lake Chamber President/CEO Derek Miller said he and his team are working to ensure as many distressed Utah businesses as possible get access to the new round of funding.
“The Economic Response Task Force has monitored the distribution of Paycheck Protection Program funds since the beginning of the program and has assisted Utah businesses getting access to those funds,” Miller said in a statement. “When those funds were quickly exhausted we immediately worked with businesses across the state to encourage Congress to make more funding available. Through the Salt Lake Chamber we sent a letter to our federal delegation urging immediate Congressional action, and almost 250 businesses signed on.
“Needless to say, we were heartened to see bipartisan support come together today to make this new funding possible, and I encourage businesses everywhere to stay in close contact with their respective lenders, to ensure that when the funds are released they will have access to them.”
Some $250 billion of the new funding will go toward the group targeted by the Paycheck Protection Program, with an additional $60 billion set aside for small banks and an alternative network of community development banks that focus on development in urban neighborhoods and rural areas ignored by many lenders.
Utah Credit Union Association President and CEO Scott Simpson said that while about 1,500 U.S. financial institutions were set up with the SBA to originate the loans when the first round launched, that number has now swelled to over 5,000. The original $350 billion was swallowed up in less than two weeks, and Simpson said the sheer level of continued demand, along with many more institutions set up to process the loans, would contribute to the new funding going out even faster.
Some banking industry watchers believe that could happen in as little as three to four days after the money becomes available.
Simpson said it was likely that all but two of Utah’s credit unions would qualify as lenders eligible to disburse the earmarked $60 billion. However, he noted details on how that part of the program will work were sparse and lenders were awaiting further guidance from the Small Business Administration now that the funding has been approved.
The original $350 billion in funding for the Paycheck Protection Program provided emergency assistance to some 1.7 million U.S. businesses.
Contributing: Associated Press