By Yuka Hayashi
August 2, 2020
Wall Street Journal
Mr. Rubio, who is chairman of the Senate’s Committee on Small Business and Entrepreneurship, now faces the challenge of steering more resources to millions of already ravaged companies so they can survive the next few months.
The proposal includes $190 billion for a revamped PPP and creating a $100 billion program to provide long-term, low-cost loans to certain struggling businesses including those located in low-income areas.
WSJ: The proposal includes a new $100 billion program to extend long-term, low-cost loans to struggling companies under the Small Business Administration 7(a) program. Tell us more.
Mr. Rubio: It’s targeted at two things: At seasonal businesses who may have had their entire season wiped out, and at small businesses located in opportunity zones or other low-income census tracts.
Research shows that independently owned small businesses in minority communities and in low-income communities generally have less than two weeks of cash on hand. The biggest concern is that we would have an uneven recovery; that some of these essential businesses, many that are in the service sector, would be the victims of an uneven recovery that would further exacerbate inequalities that we have in our country, inequality of opportunity.
WSJ: Where do the negotiations with the Democrats stand?
Mr. Rubio: There are still some items to be worked out, but in general we’re certainly closer on PPP than we are, perhaps, on any other aspect of the overall situation (for the stimulus package).
[An aide to Sen. Ben Cardin of Maryland, the committee’s top Democrat, concurred that the two parties are in agreement on many PPP measures.]
WSJ: What are your plans for helping businesses in underserved communities?
Mr. Rubio: We set aside $25 billion specifically for small businesses with 10 employees or less [in PPP], and a large percentage of small businesses owned by minorities would fit in that category. We set aside $10 billion to guarantee loans through Community Development Financial Institutions that specialize in lending to communities that haven’t traditionally found traditional banks to be helpful.
One of the largest impediments we’ve learned about is financial know-how: knowing that these loans are available; knowing where to go get them; knowing what it takes to comply with the forgiveness standards; some of the financial-literacy support that small businesses would need.