Secretary Mnuchin and Administrator Carranza — Paycheck Protection Program (PPP): U.S. Territories (Velazquez, Grijalva, April 28, 2020)

Summary

A letter dated April 28, 2020 from Chairwoman Velazquez of the House Small Business Committee and Chair Raul M. Grijalva of the House Committee on Natural Resources to Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza. It notes that the CARES Act, a $2.2 trillion stimulus bill, gave the Paycheck Protection Program $349 billion for forgivable, low-interest loans. The chairs say PPP funds are not reaching underserved businesses and that SBA data published April 16, 2020 shows a disproportionately small share of loans in Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands, Guam and the U.S. Virgin Islands. They ask questions on territorial participation and on SBA efforts to inform small businesses in the territories, and request an immediate response.

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Congress of the United States
Washington, BC 20515

April 28, 2020
The Honorable Steven Mnuchin The Honorable Jovita Carranza
Secretary Administrator
U.S. Department of the Treasury Small Business Administration
1500 Pennsylvania Avenue, NW 409 3rd Street, SW
Washington, DC 20220 Washington, DC 20416

Dear Secretary Mnuchin and Administrator Carranza,

Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2.2 trillion
stimulus bill, to address the unprecedented challenges and economic downturn faced by our nation due
to the COVID-19 pandemic. As part of this legislation, Congress created a new SBA loan forgiveness
program known as the Paycheck Protection Program (PPP) to help keep small businesses afloat during
this crisis. Under the CARES Act, the program received $349 billion in funding in order to provide
forgivable, low-interest loans to small businesses to pay employees, keep them on the payroll, and keep
the businesses viable.

As we have expressed on numerous occasions, we remain concerned that the PPP is not being
implemented as Congress intended because the funds are not reaching those underserved businesses
across America that the program was supposed to assist. Moreover, SBA data pertaining to the allocation
of loans across states and territories published on April 16, 2020 has raised worries about the
disproportionate distribution of loans and, in specific, the minimum amount of loans provided to small
businesses in the U.S. Territories of Puerto Rico, American Samoa, the Commonwealth of the Northern
Mariana Islands, Guam, and the U.S. Virgin Islands.

The disparities in the distribution of PPP loans are deeply disconcerting because they do not seem to
respond to the amount of small businesses, the population or the needs of a jurisdiction due to this crisis.
For example, Puerto Rico, which counts with 44,422 eligible small businesses, 120,000 people who are
self-employed, and approximately 1 percent of the population of the United States; received only 0.17
percent of all loans by count and 0.19 percent by amount under the PPP.! In fact, it ranked 52 out of the
56 jurisdictions in total amount lent. Furthermore, small businesses in 21 jurisdictions with less
population than Puerto Rico received a larger aggregate amount of PPP loans than the island.” In
conclusion, it is safe to say that small businesses in Puerto Rico - which have recently suffered the
hardships of hurricane Maria, earthquakes and now of this pandemic - were not able to take full
advantage of the program.

Center for a New Economy, “Special Edition: The Paycheck Protection Program”, available at:
https://grupocne.org/2020/04/20/living-with-risk-daily-briefing-april-
20.4.2020+LWR+DB+%28ENG%29&utm medium=email&utm_ term=0 6289136981-9912b63665-
509773237&mc_cid=9912b63665&mc_eid=7a747f70f4.

2 Id. The 21 jurisdictions are: Alaska, Arkansas, Delaware, District of Columbia, Hawaii, Idaho, lowa, Kansas, Maine,
Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota,
Vermont, West Virginia, and Wyoming.

PRINTED ON RECYCLED PAPER
Now that Congress has appropriated $310 billion in new funding for PPP loans, it is imperative to ensure
that underserved small businesses, including those in the territories, received adequate access to the

program. Thus, with respect to program accessibility in the territories, we respectfully request the
following information:

1. How will you ensure equal access to PPP loans by underserved communities, including those in
the five territories?

2. What challenges has SBA experienced in setting and running the program in the territories and

how have those challenges been overcome?

What is SBA doing to encourage bank/lender participation in the territories?

4. What is SBA doing to disseminate information about the program in the territories to educate
small businesses?

Thank you for your attention to this request. Given the urgency of the situation, we look forward to your
immediate response.

Sincerely,

Nydi4 M. Velazquez Raul M. Grijalva
Chairwoman Chair
House Small Business Committee House Committee on Natural Resources


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