State House’s COVID-19 economic group ready to introduce legislation
Published 12:00 am Wednesday, April 22, 2020
By Liz Moomey
SALISBURY — Legislators are due back to the General Assembly Tuesday, and the N.C. House’s COVID-19 Economic Support Working Group is ready for their return with a bill draft to provide more funding for small business loans.
The working group approved a bill draft Tuesday. Rep. Julia Howard, R-77, is the co-chair of the group, and Rep. Harry Warren, R-76, is a member. The bill would appropriate $75 million to the Golden Leaf Foundation to provide emergency bridge loan funding for small businesses impacted by the COVID-19 outbreak.
The bill changes the existing program to extend the maximum length of the loan term from 4.5 years to 5.5 years, raises the hard cap of fewer than 50 employees to fewer than 100 full-time employees, increasing the appropriation from $25 million.
N.C. Rep. Stephen Ross, R-63, said the changes will help employers who have two locations or may have been just over the 50 employee amount. Small businesses need this bill, he said.
“It’s very obvious the need is there,” Ross said. “You can look back to the first program, Golden Leaf, how fast that money went out the door. I suspect that once the program goes live we’re going to see the need far exceed what we’ve got. It’s just a tremendous need out there. “
House Speaker Tim Moore said $75 million will be money well spent.
“This is a great way to get us through this because we know everyone on this call and this legislature knows someone who has a business or someone who works for a business where they are dealing with these issues,” Moore said. “This kind of loan is the difference between a business staying open and closed, between people having a job or not.”
Kasey Ginsberg, director of government relations and director of programs with Golden Leaf, said 4,037 applications by Monday had submitted applications to the program requesting more than $139 million. The average requested amount is $34,525. The applicant numbers include those who have already been approved and those who have withdrawn. There are more than 3,000 pending applications in the cue.
On Tuesday, Thomas Stith III, N.C. director for the U.S. Small Business Administration, also gave the group an update on the federal government’s Paycheck Protection Program, the funding for which was used up last week. Currently, Congress is discussing the second part of SBA loans.
The Paycheck Protection Program resulted in loans to 1.6 million applicants, with more than $340 billion of economic relief nationally. North Carolina applicants received more than $8 billion to more than 39,000 applicants. Stith said the funds are still in the process of being distributed to those small businesses.
Rep. Jake Johnson, R-113, asked Stith if Congress was considering guidelines for lenders and looking at applicants’ capital reserves.
“That is currently part of the debate now in Congress,” Johnson said. “One of the concerns as the program implemented and concluded was ensuring all businesses — all ranges of small businesses — have the opportunity to participate. Obviously we’ll see what the final legislation provides.”
Lockhart Taylor, the assistant secretary of the Division of Employment Security, provided some insight into the volume of unemployment claims and improving their response.
The division has received almost 700,000 unemployment claims since March 15. Last week, the division averaged about 80,000 calls a day and had 181 people answering the phones. During the Great Recession, the division received about 100,000 calls a week. As a result of Hurricane Florence, it received 20,000 calls a week.
“I’m very focused on getting individuals their benefits, particularly with this group of people, they’ve been weeks without any income source,” Taylor said. “We want to get these monies out, but I want to make darn sure we have legitimate individuals applying for this. I believe we are putting the safeguards in place to ensure that would be done and done correctly.”
Rep. John Autry, D-100, thanked Taylor for his work.
“Let’s not thank me until the phones stop ringing and people who are eligible for the benefits receive the benefits, we get back to work and we get some normalcy,” Taylor said.