Closed businesses for COVID-19 pandemic outbreak, closure sign on retail store window banner background. Government shutdown of restaurants, shopping stores, non essential services.
BIRMINGHAM – U.S. Senators Doug Jones (D-Ala.), a member of the Senate Banking Committee, and Ben Cardin (D-Md.), Ranking Member of the Senate Committee on Small Business, on Wednesday, April 8 led a group of their colleagues in calling on the Treasury Department and the Small Business Administration to allow payroll processing companies to disburse the CARES Act small businesses loans to reduce complications and expedite salaries to workers.
In a letter to Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza, the senators wrote “Payroll processors have the needed existing infrastructure that will enable businesses to quickly pay their workers and pending bills. Given they originate approximately 40 percent of all the payroll checks in the country and mostly cater to small businesses with 500 employees or less, involving these companies will ensure a deeper dissemination of funds nationwide to the businesses that need it most to keep their doors open.”
“It is critical that all tools be used to distribute federal funds effectively and expeditiously, including payroll processing companies used by many small businesses,” they continued. “Please consider permitting payroll processors to partner with small businesses and banks to help alleviate any potential complications for many small businesses during this tumultuous time.”
During CARES Act negotiations, Senator Jones proposed a “Small Business Lifeline Fund” that would offer short-term, no-interest “bridge” loans to employers that would be directed through their payroll processing company.
In addition to Senators Jones and Cardin, Senators Kyrsten Sinema (D-Ariz.), Chris Van Hollen (D-Md.), Mark Warner (D-Va.), and Bob Menendez (D-N.J.) also joined in sending the letter.
April 8, 2020
The Honorable Steven T. Mnuchin
Secretary of the Treasury
U.S. Department of the Treasury
1500 Pennsylvania Avenue NW
Washington, D.C. 20220
The Honorable Jovita Carranza Administrator
U.S. Small Business Administration
409 3rd St, SW
Washington, D.C. 20416
Dear Secretary Mnuchin and Administrator Carranza,
Restaurants, main street retailers, and other small businesses across the country are being forced to close their doors or severely limit their services in response to the coronavirus pandemic. Many will go bankrupt without customers, as folks stay home and practice social distancing and as states start enacting forced closures for schools and events. It is critical that all tools be used to distribute federal funds effectively and expeditiously, including payroll processing companies used by many small businesses.
The Coronavirus Aid, Relief, and. Economic Security Act (CARES) Act authorized $350 billion for the Small Business Administration to provide loans of up to $10 million. Small businesses can use the loans to maintain payroll, keep workers on the books or pay for rent, mortgage and existing debt could be forgiven, provided workers stay employed for eight weeks once they receive the loan.
The Treasury Department, in consultation with the Administrator, can allow for other organizations that do not already participate in Small Business Administration lending programs to participate in the Paycheck Protection Program.
We write to request that you allow payroll processing companies to disburse these essential funds to small businesses to reduce complications and expedite salaries to workers. In collaboration with lenders, payroll processors can play a key role in verifying payroll data to help facilitate a speedy process while also helping alleviate the risk of fraud.
Payroll processors have the needed existing infrastructure that will enable businesses to quickly pay their workers and pending bills. Given they originate approximately 40 percent of all the payroll checks in the country and mostly cater to small businesses with 500 employees or less, involving these companies will ensure a deeper dissemination of funds nationwide to the businesses that need it most to keep their doors open.
Please consider permitting payroll processors to partner with small businesses and banks to help alleviate any potential complications for many small businesses during this tumultuous time.
Media Release/Office of Alabama Senator Doug Jones
