It doesn’t take a rocket scientist to figure this out (even though we have plenty of them available to ask in Colorado): what an employer needs when there is a Stay-at-Home order and they can’t go into work is access to inexpensive capital to keep the business viable and employees on the payroll. In our survey of Chamber members, more than 90% of you shared that accessing low- or no-interest loans is key in your ability to continue to pay employees.
We know that many of you have received Paycheck Protection Program (PPP) and Economic Injury Disaster loans. In the first round of PPP funding, more than 67,000 Colorado employers received over $7.4 billion. In the second round of PPP funding so far (from April 27 to May 1), more than 46,000 Colorado businesses received more than $3 billion. I swear I personally spoke with every one of those employers, too . Our phones were ringing off the hook and our team was able to answer those calls and help. But, while we are grateful for the two and half months of payroll, it’s not enough for many Colorado employers.
Last week, the Federal Reserve Board announced it would expand its Main Street Lending Program to support small and medium-sized businesses that were unable to access the PPP or that require additional financial support after receiving a PPP loan. The Board received input from 2,200 individuals, businesses and nonprofits that encouraged the Federal Reserve to change the initial terms for the loans to allow more businesses affected by the pandemic to qualify.
- Creates a third lending option under the program that would lower the minimum loan size from $1 million to $500,000.
- Makes businesses with as many as 15,000 employees or up to $5 billion in annual revenue eligible, compared to the initial program terms, which were for companies with up to 10,000 employees and $2.5 billion in revenue.
The four-year loans will have interest rates that range from about 2.5% to 4%. The loans are not forgivable, but payments can be deferred for a year. The Federal Reserve is working to launch the program and will release information soon on what documents are necessary to apply. If you are interested in one of these loans, reach out to your banker, as the applications come through those lenders.
The U.S. Treasury will provide $75 billion for the program, using funding from the federal CARES Act. It is also evaluating a separate approach to help nonprofits. Read more about the Main Street Lending Program, including FAQs and terms, on the Federal Reserve website.
Our team is focused on helping those employers who have been the hardest hit due to the pandemic, helping those industries that continue to grow to find the talent and support they need to thrive, and all the while ensuring the rest of the nation knows how strong and resilient Colorado is. We are beginning the journey to return back to building an economy that works for everybody – and it will take all of us to accomplish it. Your feedback from the survey was helpful – we know your top priorities and we are focused on them:
- No increased costs
- More support
- Relief on taxes
Some will be challenging to deliver because our public sector is struggling financially as well, but our members are the key to economic growth for every sector – and we take that responsibility seriously. We’ll share more about the survey results soon.
In the meantime, keep letting us know what we can do to support you and ensure we are a model for the nation on how you return from COVID-19 stronger and more resilient than ever.
Here’s a video that sums up how we are working today. We hope it inspires you as well.
Kelly Brough is the president and CEO of the Denver Metro Chamber.