From the office of Claudia Tenney, Republican congressional candidate for NY-22
New Hartford, NY – Claudia Tenney, Republican congressional candidate for NY-22, today demanded that large, highly profitable corporations return all the loan money they received from the Paycheck Protection Program (PPP) which is intended only for small businesses. Tenney offered a plan to penalize those companies who seek to keep the forgivable loans and redistribute recovered funds to hard-hit small businesses based on need and company size.
Over 300 publicly-traded companies have taken more than $1 billion in PPP loans to date, including the Los Angeles Lakers basketball team and national fast-food chains like Shake Shack. The CARES Act’s initial allowance of $349 billion in small business funds were exhausted almost immediately. Meanwhile, reports suggest that big banks were inappropriately prioritizing large companies with a previous banking relationship over smaller firms – to increase their fees. Those large companies often skirted the spirit of the law by using smaller subsidiaries and shell companies to collect funds meant for actual small companies.
Claudia Tenney said, “They need to give it back now. Big business cutting in line is bad enough but taking loan funds at the expense of the little guy is obscene.”
Of the over 60% of US small businesses that applied for PPP, only 5% report being approved in the first round. More than $300 billion has been appropriated in a second round of loans.
“Small businesses, their employers, and owners are the backbone of Upstate New York. We know that after natural disasters over 40% of these firms never re-open their doors and most struggle. These loans are a lifeline for these entrepreneurs, their workers, and our communities. I have a plan to ensure the little guy gets the help he needs, by putting small businesses first in line,” Tenney continued.
Tenney’s Plan to “Put Small Business First”
1) Profitable, large corporations must return all PPP funds immediately with a penalty of 10% interest per month for late delivery. (Currently loans are forgivable and only carry 1% interest if they aren’t forgiven.)
2) Remaining funds should be prioritized by employee size, need, and access to credit. (Reports suggests that banks have given preference to large companies with bigger loans instead of serving applicants on a first come, first serve basis.)
3) Returned funds should be prioritized for actual small businesses with fewer than 100 employees. (Current thresholds disadvantage smaller businesses and allow for subsidiaries to seek funds for their parent firm)
4) Banks must accept and process loans on a relationship-blind basis. (Banks that are found to discriminate will be sanctioned and potentially lose federal business)
Tenney continued, “My plan is simple and straight forward – loans for small business should be for small businesses, not large corporations who have ready access to capital and credit. As we work to get our economy safely restarted, there must be a laser focus on ensuring our small businesses have everything they need to reopen and thrive.”
Tenney praised the Small Business Association for sealing off a time period focused on processing loans from lenders with asset pools less than $1 billion – but insisted that the Small Business Administration prioritize the loan funds by business size and need.
“I applaud President Trump and Vice President Pence for trying to expedite and clean-up this process. There’s more to be done to root out cronyism and loopholes that allow these kinds of abuses to take place,” Tenney said.
Claudia Tenney is a small business owner, attorney and 32-year member of the National Federation of Independent Business and a lifetime supporter of local small business and American manufacturing.