Las Vegas, Nev. – U.S. Senators Catherine Cortez Masto (D-Nev.) and Jacky Rosen (D-Nev.) joined a bipartisan push – led by Senators Tina Smith (D-Minn.) and John Hoeven (R-N.D.) – urging the U.S. Department of the Treasury and the U.S. Small Business Administration (SBA) to clarify that rural electric cooperatives are eligible for the Paycheck Protection Program (PPP), which was created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to support small businesses and help them maintain payroll and cover expenses during the coronavirus (COVID-19) pandemic.
Some lenders are approving PPP loans for electric cooperatives, while other lenders are refusing to do so without further guidance from the SBA. Rural electric cooperatives have urged the SBA to clarify their inclusion in PPP, and the senators called on the SBA to ensure eligibility.
“The CARES Act, and the Paycheck Protection Program in particular, was designed to provide support to small businesses across the country, many of which face significant challenges retaining employees, maintaining payroll, and covering daily expenses during the COVID-19 pandemic. The program is generally available to “any business concern” that meets SBA size standards (as well as other eligible entities). Nearly all electric cooperatives are classified as “small” businesses under SBA’s size standards, with the average distribution cooperative employing under 50 people. As these electric co-ops face the same challenges as many other small businesses, we believe the Small Business Administration should ensure they are eligible for the Paycheck Protection Program,” the senators wrote in a letter to Treasury and SBA.
Full text of the letter can be found here and below:
Dear Secretary Mnuchin and Administrator Carranza:
We write to thank you for your work in implementing the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and for supporting America’s small businesses as they work to maintain operations during the COVID-19 pandemic.
We ask that as you work to implement the Paycheck Protection Program, you ensure that rural electric cooperatives, as private corporate business concerns operating on a cooperative basis, will be considered eligible recipients under the program. Electric cooperatives are privately-owned businesses, formed by and for the benefit of the communities that they serve, primarily in rural America.
The CARES Act, and the Paycheck Protection Program in particular, was designed to provide support to small businesses across the country, many of which face significant challenges retaining employees, maintaining payroll, and covering daily expenses during the COVID-19 pandemic. The program is generally available to “any business concern” that meets SBA size standards (as well as other eligible entities). Nearly all electric cooperatives are classified as “small” businesses under SBA’s size standards, with the average distribution cooperative employing under 50 people. As these electric co-ops face the same challenges as many other small businesses, we believe the Small Business Administration should ensure they are eligible for the Paycheck Protection Program.
As you develop the guidance, regulations, and application forms for implementing the Paycheck Protection Program and other provisions of the CARES Act, we request you ensure America’s electric cooperatives are deemed as qualifying business concerns and are able to fully participate and benefit as small businesses serving their local communities.
We appreciate your attention to this matter, and look forward to continuing to work with you to implement the CARES Act in a timely manner.