Since the American economy came to a screeching halt last month, more than 22 million workers have been forced into unemployment. Millions more have been furloughed or put on unpaid leave from their jobs. The global public health crisis that has affected all of us has created dire financial circumstances for many of us and our neighbors.
Small and local businesses have been the foundation of the Long Island economy for a century. The paychecks of delivery drivers, laborers, restaurant workers and shopkeepers have put food on the table and kids through college in neighborhoods across the island.
These businesses – without the ability borrow millions or thousands of dollars at a moment’s notice – are bearing the brunt of the non-essential business shutdown. Without online sales or in-demand emergency products, those small businesses that have remained open are enduring the worst of a sharp downturn in consumer activity. Paychecks for their workers are vanishing overnight.
Late last month, a bipartisan coalition in Congress, and the White House, threw our local businesses a lifeline. As part of the $2 trillion relief bill, a federal Paycheck Protection Program was established to provide forgivable loans to small businesses to help cover employee payroll and benefit costs over the next two months. It’s the lifeline local businesses and workers need to ensure they can weather what’s ahead and be part of our eventual economic recovery.
As the leader of Long Island’s oldest community-based bank, my colleagues and I saw this program as a way we could help support the local businesses and non-profits that have been the backbone of our company since 1910. We put together a team of 100 employees to review and process applications around the clock. As a community-based bank, we are uniquely positioned to quickly add resources, cut the red tape, interpret ever-changing federal rules, and make decisions that can take global banks months to process. In just two weeks, we’d secured nearly 2,500 loans totaling $700 million for local businesses. Most importantly, because we acted quickly and beat the rush, money is already hitting the bank accounts of these businesses and their 40,000 employees.
But not all of our neighbors have been so lucky. The loan program was in such hot demand that it ran out of money. The $349 billion appropriated by Congress was quickly earmarked for 1.4 million businesses – including large, national companies – across the country. According to recent report, New York companies secured less than half as many loans as Texas companies, even though our share of unemployment claims are twice as high. That has to change.
This next round of potential funding, approved Tuesday night in the Senate, includes $310 billion more for small businesses and their workers, including $60 billion set aside for community lenders who proved so effective in the first round of the program. It is now up to the House and President to ensure this program continues so that smaller banks can once again quickly get money to our Main Street businesses.
Over the last few days my phone has been ringing off the hook with businesses looking to borrow money and do right by their workers. Honest businesses. Businesses that will – with a little help now – employ our neighbors for years after this virus is gone. I am pleased to see, so far, that Congress is rallying the same bipartisanship in helping the next round of businesses stave off ruin as we all remain focused on defeating this virus.
Local businesses can do things to prepare for House action and the President’s signature. They can reach out to their banker, complete a PPP application at the small business association’s website, and prepare their full-year 2019 payroll information ahead of time. We stand ready to once again quickly process applications without the undue burdens or fine-print requirements designed by our global competitors.
The federal government must lead our nation’s economic recovery. But local businesses – from Main Street lenders like us to the nursery, corner deli, and summer camp we have already helped – will always be the drivers of economic security for our families and communities. The faster we get our neighbors help, the faster our communities can recover when our economy comes back to life.
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