Dear Chairman Cardin, Chairwoman Velázquez, and Ranking Members Paul and Luetkemeyer:
We are writing to express support for a proposal that has been shared with you that would modify the Paycheck Protection Program (PPP) statute to extend the covered period for loan forgiveness for certain businesses located in urban business cores.
Our businesses obtained PPP loans in the first round but generally could not reopen or restart more than minimal operations because we are located in urban business cores (for example, Times Square in New York City) that have no local residents to support our businesses and no tourists or businesspeople returning yet in sufficient numbers to warrant reopening or restarting full operations. Many have been totally closed since March, 2020 because operating them at anything less than full capacity would be unsustainable.
While we spent PPP funds entirely on forgivable expenses, closed restaurants and other businesses had to spend most of the funds on rent and utilities. The hope was that by shuttering during the height of the pandemic, the business will remain viable and be in a position to fully reopen/rehire when financially responsible to do so. Accordingly, we can’t satisfy the requirement that 60% of the forgivable expenses be spent on payroll costs. Our inability to reopen and have a payroll during the 24 weeks after receipt of the loan means that the loan is not fully forgivable even though the PPP funds were used entirely on forgivable expenses.
We and other restaurants and businesses in major urban areas made the difficult decision to close entirely during the height of the pandemic rather than operate at a substantial loss and risk the viability of ours (and our longer term ability to employ people) going forward. Our inability to receive full forgiveness is a heavy weight to bear. Even at a low interest, the outstanding loans (many with a two year repayment period, which the earliest PPP loans required), will negatively affect our ability to operate at a sustainable level as things normalize.
We are hopeful that you can enact the proposed PPP statute amendment to shift the covered period for businesses in urban core areas so that businesses that had to remain totally closed throughout the past 15 months or nearly closed might find some relief.
Thank you for your consideration of our request.
[Names, businesses and locations listed]