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AUGUSTA, Maine — Greater than 16,000 Maine small companies obtained loans via a federal program that’s now out of cash, whereas others are hoping that Congress allocates further cash so as to assist them stay afloat.
Roughly one in each 10 small companies within the state obtained loans totaling greater than $2.2 billion, based on the workplace of Sen. Susan Collins, a Republican who championed this system as a part of a $2.2 trillion stimulus bundle aimed on the coronavirus outbreak.
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The so-called Paycheck Safety Program affords loans to companies with lower than 500 staff which might be transformed to grants if the companies efficiently preserve staff on payroll. Nationally, there was $349 billion obtainable in federal funding for this system, which stopped taking purposes Thursday morning in a congressional stalemate.
Republican senators have requested for an extra $250 billion for this system, whereas Democrats have additionally known as for extra funding for hospitals and municipalities to be part of the subsequent stimulus bundle. Leaders from the 2 events have but to succeed in a deal.
Full-service eating places have been the highest recipient of the loans in Maine, based on knowledge supplied by the Small Enterprise Administration via Collins’ workplace. They have been adopted by motels, legislation workplaces, limited-service eating places and automotive restore retailers.
The virus has prompted an financial shutdown that has hit the hospitality trade the toughest. Meals and lodging staff make up round 10 % of Maine’s labor drive however have accounted for 29 % of jobless claims during the last 4 weeks.
Greg Dugal, a lobbyist for HospitalityMaine, a commerce affiliation for motels and eating places, stated this system had been a “lifeline” for a lot of the trade in Maine. However others, he stated, had ready to file earlier than this system stopped taking purposes.
“We’re clearly fairly devastated by the truth that the fund has dried up, not that we didn’t anticipate that it might,” Dugal stated. “I don’t assume there’s anybody on the face of the planet that didn’t anticipate that it might, and clearly expeditious laws on the federal stage will hopefully refill these coffers.”
Kate Rush, a spokesperson for Bangor Financial savings Financial institution, stated the financial institution processed $365 million in loans for greater than 2,600 clients earlier than the Small Enterprise Administration stopped accepting loans a little bit after 10 a.m. on Thursday. She stated the financial institution had put in further work over the previous few days to get loans via in anticipation of funds working out, however nonetheless had a handful of shoppers with purposes within the works when this system shut down.
The Paycheck Safety Program received off to a rocky begin as banks struggled to shut on loans amid altering steerage from the federal authorities. Some enterprise house owners have additionally expressed concern that it could be troublesome for them to stick to the phrases of the loans so as to keep away from having to repay them. The legislation mandates that 75 % of the mortgage should be spent on payroll and staff should be returned to full-time equivalency by June 30.
Collins stated in a launch on Thursday that top demand for loans confirmed an “pressing want” for Congress to behave shortly to proceed funding this system.
U.S. Rep. Jared Golden of the 2nd District, a Democrat, joined the Republican senator in calling for elevated funding, suggesting one other $349 billion. Nevertheless, he additionally argued that the federal authorities must also amend some necessities to make sure loans could be absolutely forgivable for extra companies.
In a letter to congressional leaders, Golden stated this system “could fail to avoid wasting small companies from going underneath.” HospitalityMaine has argued that the loans needs to be transformed to grants and that the federal authorities ought to lengthen the forgiveness interval into late July.
Small companies employed 56.5 % of Maine’s non-public workforce in 2019, based on federal knowledge. That’s greater than the nationwide common of 48 %.
Information on the complete allocation of loans by state weren’t obtainable on Thursday, however numbers launched by the Small Enterprise Administration earlier within the week indicated that Maine was doing higher than most states when it comes to loans administered on a per-capita foundation.
Different states that obtained a excessive variety of loans via this system on a per-capita foundation, akin to North Dakota and Vermont, are additionally amongst these with the best share of staff employed by small companies.
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