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03.10.22

COVID EIDL loans are set to mature in April, but Schumer says the wave of Omicron, rising costs and the uncertainty of supply chain disruptions make the financial burden on small businesses too heavy to start loans. payments

The senator says an extended break would bring relief to every county in the state for More than 330,000 New York small businesses and nonprofits Who have a COVID EIDL loan

Schumer to Feds: Give Small Businesses on New York’s Main Street the Relief They Need to Recover!

With COVID Economic Disaster Loan (EIDL) payments set to begin next month, U.S. Senate Majority Leader Charles E. Schumer today launched an effort to extend the deferment period for loan payments to empower small businesses and nonprofits in New York and across the country. in a better position to fully recover from the pandemic. In a joint letter to Small Business Administration (SBA) Administrator Isabel Guzman, the senator urged the administration to extend the deferral for small businesses that have received COVID EIDL relief due to repay their loans. Schumer said the latest wave of Omicron and economic uncertainty due to rising costs and global supply chain disruptions have put the recovery of many small businesses in a vulnerable position, and that the extension of the Payment pause would give small businesses some much-needed respite and temporary relief. survive and get back on their feet.

“The EIDL program has been a lifeline for hundreds of thousands of small businesses and nonprofits in New York City, in every county across the state, struggling to stay afloat in these turbulent times. However, with loans beginning to mature next month, and many of our small businesses, from local restaurants to mom-and-pop stores, as well as nonprofits still feeling the impact of the recent Omicron surge and of rising costs due to supply chain disruptions, so many small businesses in New York are still not financially ready to bear the burden of this impending cost,” said Senator Schumer. “That’s why I’m calling on the SBA to extend the pause on EIDL loan repayments to give New York’s Main Street small businesses the temporary relief they continue to need. After two years in this pandemic, there is finally a light at the end of the tunnel, and a further extension of loan repayments will help put our small businesses and nonprofits in the best position to fully recover.

Schumer has broken down the distribution and economic impact of EIDL loans for New York regionally below:














Region

EIDL COVID Loans Approved

(one per small business or nonprofit)

Total Amount of COVID EIDL Loan Approval

Capital Region

8,755

$792,217,300

Hudson Valley

36,371

$4,046,002,794

Western New York

10,625

$975,613,302

Finger Lakes

9,489

$871,156,631

NYC Center

4,984

$470,995,400

South level

4,536

$410,217,900

Northern country

2,570

$222,986,924

Mohawk Valley

2,974

$255,896,850

Long Island

55,718

$6,149,007,952

new York

198,860

$20,284,719,202

Schumer explained that over 330,000 New York small businesses and nonprofits received more than $34.5 billion in assistance under the EIDL program and nationwide nearly four million borrowers are affected by the imminent start of loan repayments. Schumer said the SBA has the authority to extend the deadline, as it did last year, to give small businesses and nonprofits additional time before loan repayments are due. Extending the deferment period would allow small business owners to make long-term planning decisions without the looming prospect of loan repayments as another blow to their bottom line.

A copy of Schumer’s joint letter to Small Business Administration Administrator Isabel Guzman appears below:

Dear Administrator Guzman:

We are writing today in support of the nearly four million small business Economic Disaster Loan (EIDL) borrowers who continue to struggle due to the COVID pandemic and ask that you use your administrative authority to extend the period. deferment of the EIDL program to help small businesses across the country thrive as our economy continues to recover.

The EIDL program has provided a lifeline for a wide range of industries and business sectors. Although there are many encouraging signs that the economy is improving, most small businesses are not yet in a position to benefit from the recovery due to their reduced profit margins, tighter inventories, lack of access to capital and supply chain delays. Companies that have turned to the Small Business Administration (SBA) during the pandemic include some of our nation’s most vulnerable businesses. Giving them extra time before they have to repay their loans would not only provide them with much-needed relief during this time of continued uncertainty, rising costs and supply chain challenges, but would also put them in a much better place. position to prosper once the economy fully recovers.

Upon your confirmation last spring, we were encouraged by your immediate decision to extend the deferral period for the EIDL program from 12 to 24 months. This decisive use of your authority was an acknowledgment that the operating environment for small businesses remained perilous, due not only to the ongoing health threat, but also to the large-scale changes that had dramatically altered our economy during the pandemic. As you know, small businesses struggle to sustain their debts, even in the best of times. Your decision to extend the EIDL deferment period brought immediate relief and was warmly welcomed by businesses trying to pull themselves together after a year of struggling to survive.

Unfortunately, since your tenure at SBA began, additional variants of COVID-19 have forced businesses to face many challenges. The US Census Bureau reported that small businesses started in 2022 were not operating at full capacity, facing staff shortages and declining revenues. Over the past year, small businesses have faced tough decisions: do they invest their limited capital to prepare for customers who may not be able to walk through the door, or risk not being able to meet demand and suffer damage to their hard-earned reputation? ? Are they hiring workers to serve a customer base that may not materialize or are they accepting the possibility of being understaffed and overwhelmed? Are they proceeding in anticipation of a return to normal or are they constantly adapting their business model? No business can answer these questions with certainty today, yet they are inevitable, forcing small business owners to make critical decisions that will ultimately determine the viability of their businesses. These are also decisions that put enormous pressure on a small business’ balance sheet.

You have the power to reduce at least some of the uncertainty that businesses face when it comes to their EIDL loans. As you did last year, we encourage you to use the SBA’s statutory authority to provide additional leeway for small businesses whose loan payments will soon be due. As you know, small businesses are resilient and innovative. Knowing that debt service will not be a short-term concern is invaluable. Extending the deferment period allows these small businesses to use their cash on hand for operating expenses, paying employees and making long-term planning decisions.

When Congress funded the COVID EIDL program in 2020, it did so to ensure that small businesses would have access to the capital they needed to weather this pandemic and ultimately emerge stronger. After two turbulent years, we know the end is in sight, and SBA should continue to provide small businesses with resources and relief. We ask that you recognize the ongoing uncertainty and hardship of small businesses and extend the EIDL COVID-19 deferment period.

Truly,

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