ABERDEEN, S.D. — Small business owners didn’t waste any time applying for coronavirus relief through the Small Business Administration Paycheck Protection Program’s pot of $349 billion in funding for forgivable loans to small businesses and nonprofits.
U.S. Senator John Thune, R-South Dakota and other lawmakers said that the overwhelming response to the program shows a need for Congress to approve another round of funding for small businesses.
“The number-one goal of the Paycheck Protection Program is to help America’s small businesses pay their workers and keep them employed, Thune said. “If we need to increase funding for the program to make that goal achievable for more businesses, that’s what we should do.”
Senate Majority Leader Mitch McConnell hopes to move a $250 billion proposal to strengthen the Paycheck Protection Program on Thursday, April 9, by unanimous consent.
Thune’s press secretary, Ryan Wrasse, said early applications indicate that the current funding may not be sufficient, and Thune doesn’t want that to deter eligible individuals who need it from applying.
The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made and employee and compensation levels are maintained.
Payroll costs are capped at $100,000 on an annualized basis for each employee.
Loan payments will be deferred for 6 months.
Small businesses and sole proprietorships have been able to apply for and receive loans to cover their payroll and other certain expenses through existing lenders since April 3.
Starting April 10, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
Scott Oswald, Electric Co. of South Dakota's Aberdeen location, said lenders and small business owners received information on how the program would work and were left with many unanswered questions.
Oswald said the lenders and business owners received the information on the program at the same time, noting that some banks process applications differently than others.
His business has an application submitted, which is now being processed. Oswald said 10 to 15 families would be supported by the program’s funds, if the application is approved. If not, Oswald can’t say for sure if next week would be the week that they start seeing the coronavirus stifle work enough to impact paychecks.
The Electric Co. of South Dakota has locations in Aberdeen, Brookings and Bismark and serves customers in both Dakotas and Minnesota. The contractor company installs all types of conduit for natural gas, water and electricity and specializes in boring and trenching.
"I think it's a really good thing what they're trying to do with this program," Oswald said of Congress's efforts to keep workers employed and paid.
"We all talk to one another; it's like a circle. This would be big for everyone," he added, referring to other business owners in the area.