The Maryland Department of Labor is reporting 399 new unemployment claims in Kent for the first two weeks of April.
This tops 368 claims for all of March when COVID-19 cases in the state were on the rise.
Total claims in March statewide came in at 133,000, but the first two weeks of April alone exceeded 170,000.
The unemployment spike couldn’t come at a worse time when yesterday the Small Business Administration announced that the Payroll Protection Act passed by Congress last month had exhausted its $349 billion allocation under the $2.2 trillion Cares Act.
The program has been responsive to the needs of local businesses in meeting payrolls.
“The impact of the PPP Loan program will be seen when businesses in our region are meeting payrolls instead of laying off employees,” Rob Thompson, Sr. V.P. of Chesapeake Bank & Trust Co., and member of the Kent County Economic Development Commission.
“Through the Paycheck Protection Program, a large amount of money was given out in a relatively short amount of time, which helped many small businesses in the U.S. get through this challenging time,” said Peoples Bank President Ralph Dowling in a statement to the Kent Pilot. “It is our sincerest hope that there will be another round of funding so that we get the chance to help every single one of our small business customers get the loans they need for their business to keep running as smoothly as possible.”
The PPP program was not without it challenges for small banks, but it did help put money into the hands of local businesses that needed it, Dowling said.
“The Paycheck Protection Program put community banks at a distinct disadvantage to large-scale banks,” Dowling said. “Small banks were scrambling to put infrastructure in place to make the PPP Loans available to their small business customers. There was no clarity in terms of the rules or the risks, and the rules continued to evolve every day, which made coming up with proper protocols a challenge. Even with our lending team working around the clock, there was no way to help every small business customer before the funding ran out. While we are proud to have helped 41 small business get access to PPP loans totaling just over $4 million, our lending team and The Peoples Bank as a whole was and is devastated for our small business customers that didn’t have a chance to be accepted into the program.”
Injecting more money into the exhausted fund may not be so immediate as some Senate Democrats have indicated they will not give unanimous consent for an additional $250 billion for PPP — without an additional $100 billion for hospitals, $150 billion for local government and additional money food assistance.
Senate Majority Leader Mitch McConnell indicated this week that he wanted a clean bill for an additional $250 billion for PPP, without add-ons.
The Senate is in recess since passing the Cares Act and will remain so until the middle of May, but the Senate can hold pro forma sessions to allocate money–but only by unanimous consent. One objection can stop the bill from moving.
Sen. Ben Cardin of Maryland, the ranking member of the Senate Small Business Committee, did just that to negotiate more money for hospitals and state and local governments. He said it was imperative that addressing the health crisis was as important as injecting money into small businesses.
“Small businesses in every community across America are hurting. We all know this and want to help them now,” Cardin said in a statement emailed to the Kent Pilot on Friday. “The way we do that is by, first, getting more money to the state and local governments who are on the front lines of battling this public health crisis. If we cannot curtail the public health threats, we cannot reopen our country. Second, we must get more funding to the loan and grant programs that Congress established to inject capital into our small businesses who are in desperate need. The disaster loans and grants program (EIDL) has been over-subscribed for a week and needs cash now. The Paycheck Protection Program, has just run out of funding. It also needs some immediate fixes that will allow more small businesses to keep workers on payroll during this emergency period.”
SBA’s existing Economic Injury Disaster Loan program provides long term loans, up to 30 years, while the exhausted PPP program requires small businesses to pay the money back in just two.
The EIDL program long predates PPP and was established to provide assistance to small businesses affected by natural disasters, such as floods and hurricanes. Businesses in Ellicott City received EIDL loans after the floods in 2018.
Currently, SBA is only authorized to make $7 billion in EIDL loans and Cardin believes that there’s no legitimate reason not to increase funding to EIDL — to give small businesses more options in battling the COVID-19 economy.
Cardin has asked for an infusion of $50 billion into EIDL, which would allow SBA to make up to $350 billion in loans. With PPP and EIDL, small businesses would now have a pool of $600 billion in available loan funds to manage the economic fallout from the pandemic.