Schumer pushing for extension of Payroll Protection Plan.
Local business owner says program helped keep 22 people working
With lawmakers on both sides of the aisle offering support, U.S. Sen. Charles Schumer believes there will be an extension of the federal Paycheck Protection Program to help businesses keep employees on the payroll during the COVID-19 pandemic.
“This has bi-partisan support,” Schumer said of the proposed extension through the end of the year.
Right now, however, the PPP program’s first round is still active. Businesses that didn’t get, or apply, for money during its start in April still have until
August 8 to apply for a loan from the federal Small Business Administration.
Administered through local banks, the PPP is designed to help businesses keep employees on the payroll, even as business slows due to the pandemic.
Local business owners on Thursday said the program was a life-saver, especially following the March shut-down of many businesses as COVID-19 spread through parts of New York.
“It helped us keep our staff,” said Todd Feigenbaum, who hosted Schumer Thursday at Feigenbaum Cleaners in Glens Falls.
His $130,000 loan helped him retain all of his 22 employees here and at branches in Queensbury, Wilton and Saratoga Springs.
Business at his stores fell 80 percent during the initial shutdown, although it has since crept up to about 50 percent of normal.
Joining Feigenbaum were Susan Ungerman and Jonathan Phillips, who operate Ungerman Electric and Phillips Hardware respectively in Albany County.
“This PPP saved our business,” said Ungerman, whose firm focuses on residential customers.
She said her business dropped off when people were afraid to let service technicians such as electricians inside their homes.
With $521 billion loaned nationally so far, the PPP effort was designed to counter that trend, but as the pandemic shows no signs of fading nationally, there is pressure for a second round.
Schumer noted that the program has already been modi
fied. The deadline was originally earlier, but it was extended and the federal government made it easier to apply. There is still approximately $130 billion available.
Initially, recipients had to use 75 percent toward payroll in order for their loans to be forgiven by the government. That was later changed to 60 percent in order to let business operators meet other obligations such as rent.
Schumer wants the second round, dubbed “P4” to allow for businesses to get up to 250 percent of monthly payroll costs, up to a maximum of $2 million.
A focus also would be on small businesses and non-profits with fewer than 100 employees, selfemployed borrowers, and rural and historically underserved communities.
The second round wouldn’t go to publicly funded companies.
Banks that help carry out the program would get a $2,500 fee to keep them from “cherry picking” large borrowers.
The New York Democrat acknowledged that some of the initial funding went to some well-funded companies. The Project on Government Oversight, a watchdog organization, issued a report Wednesday that at least 1,322 companies backed by private equity investors received PPP loans worth up to an estimated $3.4 billion.
Schumer said he wants to install watchdogs for a second round of loans to prevent that from happening again.
Moreover, he wants to claw back some money from businesses that didn’t need it, especially large companies.
“We are now having our oversight board do an audit and we are going to ask those big companies that didn’t need it to return it,” said Schumer.
“The hedge funds, the fat cats that got it, we are trying to get that back,” he added.
He did say he was OK with some of the money going to organizations like Off Track Betting parlors and churches since they all provide jobs for people.
Besides seeking government help, businesses have also changed the way they operate during the pandemic.
Feigenbaum, for instance, turned his dry cleaning store into an operation that requires minimal contact between customers and employees.
Customers now put their clothing items in bags themselves and the clothes sit untouched for 24 hours, which reduces the chance they will transmit any coronavirus or other microbes.
And when customers get their clothes back, they check themselves out on the other side of a plexiglass panel that is between them and workers.
“It’s touchless,” he said of the process.