An important program to help Arkansas small businesses remain operational during the coronavirus pandemic and viable in the future just received additional funding. Congress passed, and the president signed into law, the Paycheck Protection Program and Health Care Enhancement Act, which allocates an additional $320 billion to the Paycheck Protection Program (PPP). The immediate infusion of money into the program will allow the SBA to reach even more small business owners in need of assistance in these trying times.
Created by the Coronavirus Aid, Relief and Economic Security (CARES) Act, the PPP provides low-interest loans to small businesses to use for payroll, mortgage interest, rent and utilities, with a portion of the loan eligible for forgiveness. The PPP was designed to give small business owners the ability to maintain payroll and operational costs, so they can pay employees and avoid closure as a result of declining, or worse, complete loss, of revenue.
Recognizing the critical need to help small businesses survive the financial hardships caused by the coronavirus, Congress provided significant funding for the program when it was established.
Unfortunately, the need for relief vastly outpaced the $349 billion it was originally allocated. Based on the popularity of the program, Congress recognized the need for additional funding. According to the Small Business Administration (SBA), which administers the PPP, 14 years’ worth of loans were approved in 14 days. That amounts to 1.6 million loans totaling more than $340 billion.
The SBA had already approved more than 21,000 loans worth more than $2.7 billion to Arkansas small businesses before the program was replenished. PPP loans were approved for a variety of establishments across the state. Family owned businesses—from sporting goods sales to auto repair shops—were among the initial recipients, as were local restaurants, construction companies and non-profit agencies.
One of those non-profits, Stepping Stone School for Exceptional Students, is a comprehensive service provider to people with developmental disabilities and their families. Stepping Stone’s therapeutic preschool is the only full-time one of its kind in Crawford County. Toni Wilson, the Executive Director of Stepping Stone, said the PPP funding gives her “the means to continue paying agency staff through the pandemic.”
This lifeline is vital for Arkansas’s economy, given that over 99 percent of the state’s businesses are small businesses. When the initial funds for PPP ran out, many small business owners were left in limbo, adding to the already high level of anxiety they have faced since the onset of this crisis. The approval of additional funds will allow more small business owners to benefit from the program. It will help them keep the doors of their business open and ensure their employees, who they clearly value and respect, are paid. I encourage small business owners who have not applied for a PPP loan to visit https://www.sba.gov/paycheckprotection/find to locate local SBA-approved lenders.
Small business is our nation’s economic backbone. If we want to have a resurgent economy when we reopen, then we cannot leave entrepreneurs and owners hung out to dry during this crisis. I am pleased Congress found a path forward to help more small businesses in Arkansas and across the country weather the storm.