Rep. Davids calls for changes to new federal loan program
Small businesses in Kansas are facing unprecedented challenges, with many shut down and awaiting help from the government during the COVID-19 pandemic.
Many weren’t deemed essential functions or services by the “stay-at-home” order, and some have stopped operating, awaiting government help.
Although federal legislation for small business loans was approved and went into effect last Friday, the structure of the loan program, which works through lending institutions, was not put into place early, according to Kansas officials. Some lending institutions did not receive information on how it works early enough to start on Friday, meaning more waiting for some small businesses.
U.S. Rep. Sharice Davids, D-3rd Dist., on Tuesday called for changes to the federal Paycheck Protection Program to provide quicker and better access to loans for small businesses under the federal CARES Act.
“Kansas small businesses are counting on these loans to keep their businesses afloat and to pay their workers, and it’s unacceptable that many can’t even access this critical assistance,” Rep. Davids said in a statement Tuesday. “While the Trump administration needs to provide much clearer guidance about the implementation of the Paycheck Protection Program, Congress also needs to provide more resources to bolster the program and get relief to small businesses quickly. The House should act on this without delay.
“We must also set guardrails for how this program is administered so that its benefits reach smaller and less advantaged businesses,” Rep. Davids stated. “I’ve introduced legislation that would provide $10 billion in funding for early stage and startup businesses in low-income geographic areas to keep funding flowing to these vital businesses.”
The state of Kansas and local governments also are trying to help with small business loans.
“We recognize that small businesses and large businesses across the state are really feeling the pinch from the coronavirus outbreak, and particularly the businesses not providing essential services under the framework,” David Toland, Kansas secretary of commerce, said Tuesday in a video conversation with U.S. Rep. Sharice Davids, D-3rd DIst. “This is a temporary period, we don’t know how long it’s going to last, but we are determined to support our businesses through this, and see them to the other side of it.”
“This is a different type of economic challenge than we’ve ever seen before,” Toland said. “The pace of this is faster than anything that’s been in living history. So what we’ve had to do is change the way we respond, and to act more swiftly, more creatively, and perhaps with a greater sense of urgency than we’ve ever had to as a state agency.”
The state Commerce Department has been working with state, federal and local initiatives to get loans into the hands of small businesses as soon as possible, according to Toland.
The Paycheck Protection Program was created at the federal level, with $350 billion allocated nationwide for Small Business Administration loans. These loans are to cover eight weeks of payroll and expenses for small businesses, and the loans are forgivable.
Toland said although the federal legislation was passed quickly and SBA moved as fast as it could, in about six days, it was not fast enough for small businesses that need help right now.
“There’s a fair amount of frustration about processes, and this really has to do with the volume and depth of need across the country and certainly, within the state of Kansas,” Toland said. “We’re grateful to you, Rep. Davids, for your leadership on the Small Business Committee, and pushing with SBA to make sure they understand our businesses need help and need help now. It’s got to move at a faster clip than it is.”
Toland said the state commerce department is trying to provide technical assistance to small businesses. It has retrained 10 of its staff to provide technical assistance in conjunction with assistance from Small Business Development Centers, local chambers of commerce, economic development professionals and lenders.
The state Commerce Department has started a live chat for questions and answers about SBA-related questions at Kansascommerce.gov, he said. He said he recognized there were things they couldn’t control, and assistance at SBA was in that category.
Rep. Davids noted that the legislation was passed quickly for the federal government, but she understood that it’s not necessarily fast enough for the small businesses.
“One of the things I’m going to keep doing is making sure SBA has the support and resources it needs to implement the program,” Rep. Davids said. “My hope is that we’ll be able to see movement more quickly on this.”
State and local loan programs
Toland also outlined state and local loan programs for small businesses, including some new ones.
Kansas started the $5 million HIRE (Hospitality Industry Relief Emergency) Fund recently for hospitality businesses such as restaurants, bars, lodging establishments and event centers, but all those funds have now been allocated, according to Toland.
The first dollars in that program were allocated within 72 hours, he said. It was a bridge program designed to provide dollars quickly until the businesses could get funding through another program, such as an SBA loan, according to Toland.
“We were able to support 346 hospitality businesses across the state,” he said. “Unfortunately we have over 1,000 other businesses that have applied which we haven’t been able to help yet.”
He said the state commerce department is continuing to accept applications for this program, in case additional dollars are made available later. He said they don’t know if additional dollars will be made available later, but if they are, it will be on a first-come, first-served basis. Those who have already applied do not need to reapply, he said. Applications can be made at Kansascommerce.gov.
Toland said the state also has some funding in existing programs for businesses, and is trying to refashion them as part of its COVID-19 response.
Thirty-seven Kansas communities have revolving loan funds where they make loans to small businesses for improvements such as a new façade or new sign, he said.
The state issued directives to communities to make those funds available as working capital to small businesses in their community, he said. Those loans could be used to pay rent, pay salaries or keep the lights on.
He said there was a good response from 37 communities that are actively pushing these dollars out to those that need them, with urgency.
“What the state has done,” he said, “is we cut the red tape in that program.” It normally takes 30 days for an environmental certification, and that was cut to one day, he said.
Communities in the “Incentives Without Walls” loan fund program also have been asked to use these funds as working capital for small businesses temporarily, and quickly, he said.
New state job site
Toland said while there have been significant job losses in the state, there are also job opportunities out there right now. The state has started a new job site for employers and job seekers, to link up opportunities in Kansas related to the coronavirus pandemic.
The site, https://www.kansascommerce.gov/covid-19-response/covid-19-jobs-and-hiring-portal/, is free to use for job seekers and employers, he said. It includes job opportunities in retail, health care and local government.
Close to 1,300 jobs were listed on the site recently, he said. Companies are hiring this moment and are looking for people who want to work, he said. Besides providing jobs for people, he said, it also helps keep things running, providing essential functions for the state and economy.
“This is a real challenge, and it’s like nothing we’ve seen before, but it is a temporary challenge,” Toland said. “We don’t know how long that is exactly, but we are going to get through this.”
He said the state Department of Commerce is determined to make sure they are a strong partner, so they all come out on the other side of this, prepared to turn on the economy at a high rate of speed, and all get back to a new normal.
Rep. Davids, who was wearing a T-shirt in the video that said, “Stay home, stay safe, stay strong,” said it was heartwarming the way people in communities are helping each other. She thanked workers on the front lines, including health care workers and food workers, for their work in keeping people healthy and safe.
To see Rep. Davids’ video question-and-answer session with Secretary Toland, visit https://www.facebook.com/RepDavids/videos/642472146606690/.
To have a live chat about SBA programs with the Kansas Department of Commerce, visit Kansascommerce.gov.
The state’s COVID-19 response jobs and hiring page is at
https://www.kansascommerce.gov/covid-19-response/covid-19-jobs-and-hiring-portal/
For more information about bills Rep. Davids is backing, visit https://davids.house.gov/media/press-releases/davids-introduces-bill-help-small-businesses-during-coronavirus
https://davids.house.gov/media/press-releases/davids-calls-upcoming-coronavirus-response-packages-include-direct-funding
and https://davids.house.gov/media/press-releases/davids-calls-treasury-department-small-business-administration-ensure-small.
Rep. Davids’ coronavirus resource page is at https://davids.house.gov/coronavirus.