Rep. Andy Kim (D-NJ) is teaming up with other legislators to aid struggling small and mid-sized businesses who may be accidentally left behind in terms COVID-19 relief programs.
Kim was joined by other Democratic members of the New Jersey House delegation to call on the Federal Reserve to expand the eligibility criteria for the Main Street Lending Program, in order to help bolster economic growth and save jobs.
The Main Street Lending Program, introduced in April, is supposed to act as a complement to the Paycheck Protection Program by helping companies that might be considered too large to receive PPP benefits, but too small to get credit through capital markets.
However, due to potentially unclear language in the program’s guidelines, many businesses could be inadvertently excluded from receiving coronavirus aid.
In a letter addressed to Federal Reserve chairman Jerome Powell, the legislators asked Powell to clarify the eligibility for certain businesses, like hair salons, nail salons and barber shops, which take a more active approach in managing properties than more traditional, passive businesses.
Owners that are engaged in the construction, financial planning and oversight of their businesses could be blocked from getting program benefits because of the Small Business Administration’s strict guidelines.
“While we understand that the Federal Reserve has a responsibility to carefully evaluate risk and maximize the likelihood that loans made with taxpayer dollars are repaid, we fear that overly stringent qualifying requirements will be too exclusionary for many business and industries and could therefore have a devastating impact on thousands of working families in our districts,” the lawmakers wrote.
They also called for further consideration for those in the construction, hospitality, manufacturing, and other asset-based industries, which are currently struggling with the loan size requirements in the program.
“Asset-based borrowers in industries such as construction, hospitality, and manufacturing are in critical need of capital that is currently unavailable or hard to access in traditional markets,” the letter said.
While the members of the New Jersey House delegation said they understand the need for safeguards, they urged the Fed to make changes that protect employees.
“We believe that any changes made to the programs should be transparent and put workers first,” the letter states.
Arianna Coghill A recent VCU journalism grad, she’s been writing for four years with bylines in the Washington Post, Chicago Tribune and the Associated Press.
