Opinion

American Taxpayers Deserve to Know Who’s Receiving PPP Loans

By Sen. Ben Cardin
May 19, 2020 at 5:00 am ET

America’s entrepreneurs and small-business owners are known for their optimism, resiliency and perseverance. But today they are facing an unprecedented public health crisis that is beyond their control and of no fault of their own. With fewer cash reserves than larger companies, small businesses are particularly vulnerable to the widespread economic disruption caused by COVID-19 and are desperate for help.

As ranking member of the Senate Small Business and Entrepreneurship Committee, I was proud to help negotiate Congress’ response to COVID-19 as part of the bipartisan Small Business Task Force with Sens. Marco Rubio, Jeanne Shaheen and Susan Collins. We worked together in good faith to create three new programs as part of the CARES Act: the Paycheck Protection Program, a new Small Business Administration emergency disaster grant program and a small-business debt relief program.

The premise of the Paycheck Protection Program was to provide loans to small businesses that are fully guaranteed by the government and forgiven if used to maintain payroll. The $349 billion program was launched by the Small Business Administration and Treasury Department just one week after being enacted into law.

More than 4.4 million small businesses have already received PPP loans, which are helping with payroll and other expenses. For example, one of my constituents, Matt Reade, the CFO of Bakery Express in Halethorpe, Md., says that the PPP loan his company received is “a crucial lifeline for us to weather the storm and push through this period of low volume and short cash flow.”

In order to get the money out to businesses like Bakery Express as quickly as possible, we depend on the goodwill of business owners to self-certify their true need for a PPP loan and that their business was genuinely small, rather than institute a lengthy certification process that would have slowed the flow of money to small businesses. Like many, I’ve been disappointed that the lack of red tape has allowed pro basketball teams and large corporate entities to qualify for loans, and I welcome measures by the administration to provide greater scrutiny.

Demand for the PPP program was overwhelming. Those businesses with established banking relationships were able to secure funding, but too many small-business owners in underserved communities were left out. This was both disheartening and in direct conflict with the spirit of the program. That is why my Democratic colleagues and I urged the administration to dedicate a portion of PPP funds for small and mission-based lenders that have a record of getting capital to underserved small businesses.

On April 23, Congress approved an additional $310 billion for the PPP program, with $60 billion reserved for smaller lending institutions, such as small credit unions, community banks, Community Development Financial Institutions and Minority Depository Institutions that can better reach underbanked and underserved businesses. So far, average loan amounts indicate that this second infusion of funding may be reaching a wider range of borrowers.

But there is more that can be done. First, we need to dedicate specific funding for the smallest businesses with the greatest need – especially those in underserved areas. Second, the administration must do more to coordinate its implementation of PPP with SBA’s Economic Injury Disaster Loan and Emergency Grant program, which provides small businesses with low-interest, long-term loans directly from the federal government, as well as a quick infusion of emergency capital.

And third, the administration must provide Congress and American taxpayers with detailed information about the types of businesses that are receiving these loans. I am very proud of the speed at which SBA and the Treasury Department’s employees have increased their capacity to meet the extraordinary challenge facing American small businesses. However, expediency must never come at the expense of transparency with the American people.

On May 5, Senate Republicans blocked legislation I introduced with several of my Democratic colleagues, which would provide Congress and the public with timely, detailed data on PPP, the EIDL and Emergency Grants Program, and the Debt Relief Program.

The bill would mandate the daily reporting of the number of loans approved and a projection of how long the remaining funding will last, as well as the weekly reporting of the lending trends in the program broken down by geography, demographics, loan sizes, industry and lender type.

As we move forward, my Senate colleagues and I will conduct public hearings and rigorous oversight to ensure that abuses under this program are identified and corrected.

An understanding of how PPP loans, EIDLs, Emergency Grants and small-business debt relief are being distributed is fundamental to Congress’ ability to assess the successes and failures of our small-business relief efforts, and will inform us as we continue to improve these programs to meet the needs of the entire small business community.

This public health and economic crisis is not over – and neither is our work to provide help for our small businesses in Maryland and across this country.

Democrat Ben Cardin represents Maryland in the United States Senate and is the ranking member of the Senate Small Business Committee.

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