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Many Utahns are preparing to go after a piece of Congress’ latest COVID-19 financial relief for businesses, which could begin flowing as soon as Friday.
They are so eager, in fact, officials are worried there could be another logjam of applications.
The U.S. Senate approved $483 billion for a new coronavirus aid package Tuesday, which includes $331 billion more for payroll loans meant to help small businesses keep paying their workers — after $349 billion in the Paycheck Protection Program was allocated in a matter of days.
“It’s hard to fathom $350 billion going that quickly,” Derek Miller, CEO and president of the Salt Lake Chamber, said late Tuesday. “But I think what it tells us is just how great the need was and the great need that continues.”
The House of Representatives is expected to vote Thursday on the latest package, which also has $75 billion for hospitals battling COVID-19 and $25 billion to expand testing for the virus.
The head of the Utah Bankers Association said Wednesday that with House approval, loan processing could resume shortly after the bill is signed by President Donald Trump.
With nearly 5,000 banks and credit unions now able and poised to process and submit loans, the bottlenecks could be even worse, said association executive director Howard Headlee.
“Everybody understands the process now,” he said. “The money will go much faster.”
Nearly $3.6 billion from that prior round of the Paycheck Protection Program has gone to more than 21,000 businesses in the Beehive State with 500 workers or less. The Tribune was among the businesses to receive a loan.
“They keep on calling this a stimulus plan. It’s not a stimulus,” Utah Sen. Mitt Romney said, shortly after the Senate approved replenishing the program. “There’s no economy to stimulate right now. This is a rescue plan. This is a relief plan helping people get money during a very difficult economic time.”
And the way the original relief package was written, Romney and others noted, if the loans are used to pay workers and cover other COVID-19-related business expenses, they don’t have to be repaid.
The latest bill puts $50 billion more into a separate emergency disaster loan program for businesses, which carry a 3.75% interest rate and do have to be paid back.
Wasatch IT, a technical support company in Murray, got a $400,000 paycheck protection loan in the first round and its co-owners Spencer and Bahar Ferguson said the money has helped them keep nearly 35 workers on staff through the crisis.
“We’re giving our people the ability and confidence to know that their job is here and not having that fear they may be on the chopping block,” company president Bahar Ferguson said Tuesday.
Officials say thousands of other businesses saw their loan requests through local banks and credit unions stalled last week in the crush of applications.
Rep. Ben McAdams, D-Utah, said many then “were caught in the frustration of Washington politics” over the money not being replenished sooner, given the demand.
“We have been hearing from so many businesses that are just caught in the limbo of their applications, waiting to know if the funding is going to be there and they’re trying to hold on employees,” McAdams said.
The first round of funding also drew criticism after it was reported that several large national restaurant chains including Shake Shack and Ruth’s Chris Steak House got loans in spite of their size. Some have returned the money.
U.S. Treasury Secretary Steve Mnuchin on Tuesday defended the program, noting that more than a million businesses with 10 workers or less drew loans too, “so there is very broad participation by really small businesses.”
But, Mnuchin added that he was gratified some larger firms were giving their relief funds back. “The intent of this money was not for big public companies that have access to capital,” he said.
Romney said such anomalies were likely in a program dispensing that much cash at a historic pace — and that it’s likely more abuses will surface.
“If you want to get money out quickly to help the millions upon millions of Americans that are out of work or about to be put out of work, you can't spend all your time looking at the two or three cases where something went wrong,” the Utah Republican said. “That's going to happen.”
Sylvia Castro, executive director of the Suazo Business Center in Salt Lake City, said many minority business owners in Utah who didn’t have well-established ties to a local bank or credit union were at a disadvantage in getting loans the first time. And by the time some of them got up to speed, the program had already closed.
“It just went by so quickly that it kind of took us all by surprise,” said Castro.
This time, the newly approved paycheck protection money includes $60 billion aside for lending through small and medium-sized banks and credit unions, with the aim of steering more money to small, rural and minority-owned businesses.