PPP

June 2020: EIDL & PPP

This was originally published June 26, 2020 in the OCDCA Newsletter.

Federal News

Economic Injury Disaster Loan Program Reopens

The Small Business Administration reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible small businesses and nonprofits experiencing economic impacts due to COVID-19. Here's the press release.

SBA's EIDL program offers long-term, low interest assistance for a small business or nonprofits. These loans can provide economic support to help alleviate temporary loss of revenue. EIDL assistance can be used to cover payroll and inventory, pay debt or fund other expenses. Additionally, the EIDL Advance will provide up to $10,000 ($1,000 per employee) of emergency economic relief to businesses that are currently experiencing temporary difficulties, and these emergency grants do not have to be repaid.

SBA Announces Round 2 PPP Through CDFIs

The Small Business Administration announced that they are setting aside $10 billion of Round 2 funding for the Paycheck Protection Program (PPP) to be lent exclusively by Community Development Financial Institutions, or CDFIs. This set-aside ensures that forgivable, federally-backed loans will go to small businesses and community development nonprofits serving low-income communities. PPP loans are forgiven if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. Forgivable loans through CDFIs have a better chance of reaching marginalized communities. While the $10 billion set-aside is an important step forward, more work remains.

The Opportunity Finance Network's CDFI Locator tool has a filter to help small businesses find PPP loans and info on the Ohio CDFI Network here.

President Trump signed H.R. 7010, the Paycheck Protection Program Flexibility Act (PPPFA). The bipartisan bill relaxes rules governing the Paycheck Protection Program (PPP), increasing flexibility for loans that are originated under the PPP from this point forward. The bill extends the "covered period" during which businesses must expend their PPP funds, from eight weeks to 24 weeks-although recipients that received PPP loans before the enactment of the legislation may opt to retain the eight-week covered period.
For additional information, visit the SBA disaster assistance website at SBA.gov/Disaster.

Economic Development Administration Grants

The agency recently announced a $1.5b grant program as part of the CARES Act for economic development assistance programs to help communities prevent, prepare for, and respond to coronavirus.

Ex-Comptroller Otting's Attack on CRA

David Dayen of the American Prospect wrote an article explaining how Ex-Comptroller Joseph Otting "waged a determined effort at Office of the Comptroller of the Currency (OCC) to destroy the Community Reinvestment Act (CRA), one so brazen that he couldn't even get support from Trump-appointed regulators (FDIC and Federal Reserve) or even bank trade groups." NCRC and partners have pledged to file litigation. Recently House Financial Services Chairwoman Maxine Waters (D-CA) and Subcommittee Chairman Gregory Meeks (D-NY) introduced a Congressional Review Act resolution (H.J. Res 90) - a disapproval resolution that would overturn this harmful rule is expected a vote in the House soon. US Senate passage is unlikely to occur but maintaining pressure is important as practically rolling out the new rules will take a couple of years or more creating future opportunities for legislative and/or administrative solutions.

State News

State Small Business Resources

The Ohio Development Services Agency has some resources to help business owners make it through the current crisis. Here are some of the resources, and most of them are offered at no cost to businesses.

JobsOhio is considering a new strategy to fight inequality and to expand its focus to small business. "We will play a significant support role to the government." JobsOhio President J.P. Nauseef said. "For sustainable and inclusive recovery, we know we need to do more, we have been challenged to do more."

Governor DeWine Signs HB168 - Brownfield Regulatory Reform Legislation

From our friends at the Greater Ohio Policy Center (GOPC)...HB168 will take effect on September 14, establishing the Bona Fide Purchaser Defense (BFPD) into Ohio law to encourage the redevelopment of brownfields.

Recently Governor DeWine signed HB168 into law, following the unanimous passage of HB168 through both the Ohio House and the Ohio Senate last month. The bill, introduced in March 2019 by former State Representative Steven Arndt (R - Port Clinton), provides liability protection to purchasers of brownfields sites through an affirmative defense. Brownfields are found in every county throughout the state, in both rural and urban communities. These blighted sites discourage investment and create barriers to job creation and economic development.

While incentives are still needed to offset the increased cost of redeveloping brownfields, HB168's passage will encourage brownfield redevelopment by incorporating the bona fide purchaser defense (BFPD) into Ohio law. Visit GOPC's BFPD FAQ page for more details on the BFPD.

Since the sunset of the Clean Ohio Revitalization Fund (CORF), brownfield redevelopment has been down in the state. GOPC, along with public and private sector stakeholders, acknowledge both regulatory reforms and increased incentives are needed to encourage the redevelopment of brownfields to spur economic development in the state. Last month, Reps. Hillyer and Swearingen introduced HB675, legislation to re-fund the CORF program.

April 2020: PPP Expansion

This was originally published on May 1, 2020 in the OCDCA Newsletter.

Federal News

Advocacy Alert: Call for Emergency Rental Assistance

Negotiations on the next coronavirus relief bill have already begun! Please ask your member of Congress to support $100 billion for Emergency Rental Assistance.

Housing is foundational to our economy. Many of the nearly 1 million Ohioans who have been laid off in recent weeks can't pay rent and face the prospect of losing their homes in the middle of a pandemic. While eviction moratoriums can help in the short run, tenants are still responsible for paying rent and landlords need that revenue to pay their bills.

We must not leave unemployed tenants exposed to eviction or expect landlords to absorb all the losses. A responsible and complete response to this pandemic demands a substantial emergency rental assistance package.

We support U.S. House leaders' plan to include a $100 billion time-limited emergency rental assistance program in the next coronavirus relief bill. Under this proposal, low-income tenants who recently lost their jobs would apply for financial assistance to be paid directly to their landlords. This proposal would allow some arrearages to be covered, as well as rent payments going forward, until reemployment is possible. This will keep tenants stably housed while ensuring property owners can continue operating responsibly.

The next two weeks are critical. We are calling on you for help because so much is on the line for Ohio's low-wage workers who have lost their income, and Ohio's communities that are struggling economically. Please contact your member of Congress today and ask them to support $100 billion in Emergency Rental Assistance because the stability of America's tenants - custodians, cashiers, retails sales workers, restaurant and hotel workers - will determine the duration and intensity of the economic recession.

CARES Act Commits $5B to CDBG

The CARES Act committed $5 billion to CDBG with $2 billion in direct funding to states and localities under the CDBG program's current formula and $1 billion that will go directly for states to prevent, prepare for and respond to the coronavirus. The remaining $2 billion will be allocated by HUD. The CARES Act provides CDBG grantees with flexibilities that make it easier to use CDBG-CV grants and FY 2019 and 2020 CDBG Grants for coronavirus response and authorizes HUD to grant waivers and alternative requirements. Unlike the annual CDBG program, these dollars have no caps on the amount that can be sub-granted to non-profits that provide housing, education, childcare, elder services, and other services. Flexibilities also exist with HOME Investment Partnership program and information can be found here and here.

OCC and FDIC Fast Track Harmful CRA Rule Change

The comment period on proposed rule changes to the Community Reinvestment Act (CRA) ended on April 8 despite urgent calls to suspend rulemaking during the pandemic that would divert billions of dollars from low-and moderate- income communities. On April 9, Comptroller of the Currency Joseph Otting announced that more than 7,400 comments had been submitted and that the OCC would work toward issuing a final rule by early summer. We are all deeply concerned that key stakeholders serving low-income communities did not have the capacity to focus on regulatory changes while facing dire health and economic situations in their communities, and that these changes will decrease the flow of capital to those who need it most for decades to come.

The National Community Reinvestment Coalition (NCRC) latest count is that 1,616 of the comment letters or 85% of the total aligned with NCRC's position that the agencies must go back to the drawing board and significantly revise their proposal if they wish to maintain and/or improve upon CRA's effectiveness in increasing lending and investing in LMI communities. It appears that Ohioans submitted a disproportionate share of public comments. OCDCA would like to thank the many members that submitted! We'll all keep up the fight against this blatantly harmful proposal.

President Signs Fourth COVID-19 Relief Package Containing PPP Expansion

On April 24, President Donald Trump signed into law a $484 billion interim Covid-19 relief measure called the "Paycheck Protection Program and Health Care Enhancement Act." The bipartisan agreement includes an additional $310 billion for the Paycheck Protection Program (PPP), which offers forgivable loans to impacted small businesses to encourage them to keep their employees on the payroll during the Covid-19 pandemic. Of that $310 billion, the legislation stipulates that $30 billion be set aside for loans to be made by lending institutions with assets not less than $10 billion and less than $50 billion. Another $30 billion will be set aside for community financial institutions, including Community Development Financial Institutions (CDFIs), and other lenders with less than $10 billion in assets. The measure also allocates $60 billion to the Small Business Administration's Economic Injury Disaster Loan program, with $50 billion of those funds to be made available as direct loans and a further $10 billion assigned for Emergency Economic Injury Disaster Loan grants, which offer applicants a forgivable advance of up to $10,000 within an expedited timeline. In addition, the legislation also includes $75 billion for hospitals and $25 billion for Covid-19 testing. Negotiations on a fifth Covid-19 relief package will begin in the Senate when the chamber returns from its recess on May 4.

State News

Planning to Apply for Housing Development Gap Financing?

May 4 is the first day OHFA will be accepting a Notice of Intent to Apply and Exception Requests for the 2020 HDGF program. If you are planning to submit a Notice of Intent to Apply for the HDGF program, please contact Karen Banyai before submitting the materials to OHFA. Karen will work with applicants on where and how the materials should be sent to OHFA in order to ensure all materials are received and reviewed in a prompt manner. The application window will close on July 30, 2020 or after all funds have been reserved.

Ohio Creates Office of Small Business Relief

Ohio Governor Mike DeWine and Lt. Governor Jon Husted announced the creation of the Office of Small Business Relief within the Ohio Development Services Agency. The Office will coordinate state efforts to identify and provide direct support for Ohio's nearly 950,000 small businesses. The Office will initially focus on three key areas:

  • It will serve as the state's designated agency for administrating federal recovery funds awarded to Ohio for small business support and recovery.

  • It will work with federal, state, and local partners to evaluate and determine possible regulatory reforms that encourage employment and job creation.

  • It will coordinate efforts of the Ohio Small Business Development Centers and Minority Business Assistance Centers at local levels.

Resources for small businesses are available online at coronavirus.ohio.gov/businesshelp. New services and support identified by the Office of Small Business Relief will be added to the site.