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House Speaker Nancy Pelosi, D-Calif., and Rep. Ro Khanna, D-Penn., made a plea to the Small Business Association (SBA) Tuesday to include startup companies in the coronavirus bailout plan.
Startup companies could face exclusion from the Paycheck Protection Program (PPP) under the federal government’s $2 trillion COVID-19 stimulus package because of a stipulation that disqualifies companies with over 500 employees.
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Although most startups fall under the threshold, many are backed by investors or venture capitalists and are mandated to count those company’s employees as well, pushing startups over the mark and preventing them from getting much-needed aid to keep their businesses afloat.
“For these small businesses, as for many others across America, access to forgivable PPP loans will be critical to preserving jobs during the coronavirus pandemic and to securing American’s leadership in science, technology and innovation,” Pelosi and Khanna wrote in a letter to Treasury Secretary Steve Mnuchin and the SBA.
A separate portion of SBA loans under the coronavirus stimulus has allocated an additional $10 billion for small businesses that could include startups and allow such operations to take out an emergency cash grant of $10,000 that can be forgiven if utilized to cover paid leave, payroll, increased costs due to supply chain disruptions, mortgage or lease payments or repaying obligations that cannot be met due to revenue loss, according to Forbes.
The complicated requirements surrounding such loans, however, have created confusion for small businesses with investors and other affiliations on whether or not they would qualify.
The Treasury Department did not respond to Fox News’ request for comment on whether or not the current SBA loan applications would expand their criteria to include unqualified businesses or whether they would consider additional loans specific to startups.
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“We urge you to exercise the appropriate discretion under the law to secure coverage for as many small businesses under 500 employees as possible,” the letter said.
