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Sen. John Cornyn and Tim Jeffcoat provide CARES Act funding information for first BAHEP virtual general membership meeting

Senator John Cornyn
 Tim Jeffcoat  
    Bob Mitchell  

     Jimmy Spence
On April 9, 2020, the Bay Area Houston Economic Partnership held a virtual general membership meeting featuring Sen. John Cornyn and the federal response to COVID-19 as well as Tim Jeffcoat, district director for the Small Business Administration. The meeting was facilitated by BAHEP Marketing Manager Jimmy Spence, and more than 180 BAHEP members were in virtual attendance – a first in the 44-year history of the organization.
BAHEP President Bob Mitchell opened the meeting with welcoming remarks and appreciation to Sen. Cornyn for his participation. The senator said, "I’m glad that Tim Jeffcoat is on the line, too, because he and the SBA people may be the most popular folks in town now given the $350 billion that we are trying to push out to small businesses to help them stay afloat during this very difficult time.”   
Sen. Cornyn reported that Congress has passed three pieces of legislation to date the latest of which is the bipartisan CARES Act (Coronavirus Aid, Relief, and Economic Security Act) that was signed at the end of March. It has already brought $47 million in recovery grants to the Houston area. He added, "We know that this is a health crisis and an economic crisis unlike any we’ve experienced before. If you told me a couple of months ago that I’d end up voting for $2.2 trillion in spending in a single bill, and that the vote would be unanimous in the Senate, I wouldn’t have believed it.”  
Healthcare is first concern
Sen. Cornyn said that healthcare is obviously the first concern. "We’ve pushed $100 billion out the door of which $30 billion will be going shortly. There’s flexibility on how that money is spent, but the idea is to maintain capacity to make sure the hospitals and professionals are there to take care of those who need them,” he noted.    
Sen. Cornyn said that the key to dealing with the pandemic is ultimately developing drugs that can treat COVID-19. He stated, "Having a vaccine is the goal, but that’s probably going to be towards fall at the earliest. In the meantime, individuals and businesses need a lifeline; so, the federal government is providing by direct deposit to your bank account, if you filed a 2019 tax return, up to $1,200 a person, $2,400 for a married couple, and up to $3,400 for a family of four that makes up to $150,000. This is designed to tide people over to the next step which may well be unemployment insurance. We’ve extended unemployment insurance by 13 weeks and expanded the benefit by adding an additional $600 per week in federal unemployment benefits in addition to the state’s portion.”    
The senator also said that it is necessary to make sure jobs are still going to be there for people when this economy starts coming back. He offered, "That’s why we established through SBA certified lenders the Paycheck Protection Program (PPP). It’s initially funded with $350 billion and designed to provide a strong incentive for employers if they can, and not everybody can, to maintain their payroll and to help pay their rent and overhead. If they do that through June, what initially started out as a low-interest, one percent loan can then be forgiven.”
Lenders started receiving applications on April 3rd. Sen. Cornyn admitted that there have been challenges due to the overwhelming number of applications. He explained, "This is a completely new system; so, it’s a big learning curve for all of us. There are going to be gaps and unintended consequences, and we want to learn from that and make sure that we get the money to the people who need it the most as fast as we can and not waste any money if we can help it. I encourage you to reach out to my team in Houston, Jay Guerrero and Ben Daily, if there are other things we can do to help.”   
The senator reported that the Federal Reserve has announced another lending facility that will loan out close to half a trillion dollars, which will have a huge boost in terms of liquidity for companies that are finding difficulty with cash flow. He said that for companies with the collateral to secure those loans and pay them back on reasonable terms over the next couple of years, that’s another effort to help those large businesses stay as healthy as possible.  
Assistance critical for 501(c)(6) non-profits
During the virtual meeting, Mitchell expressed his apprehension in regard to financial relief for 501(c)(6) non-profit organizations. He said, "Senator, one of the concerns we have is that 501(c)(6) non-profits were not eligible for the PPP loans and/or the EIDL Program (Economic Injury Disaster Loan Program). I actually got a phone call earlier this afternoon that these non-profits are eligible for the EIDL Program. It’s so confusing. What can we do moving forward regarding the PPP? Is there a chance of getting 501(c)(6) non-profits eligible for that?”   
Cornyn replied that he has had enough feedback from people like Mitchell, chambers of commerce, and others to take another look at the PPP and possibly expanding it to include 501(c)(6)’s. He said that the goal is to allow non-profits to keep their employees on the payrolls, too. Mitchell was appreciative of that possibility and said that it’s been a tough situation for organizations like BAHEP, the Clear Lake Area Chamber of Commerce, and the League City Regional Chamber of Commerce.     
Mitchell then asked the senator what he would like to see in the next coronavirus relief package that would address issues that may have been missed in the first three bills that have been passed. Cornyn replied that there have been ideas like an infrastructure bill. He said, "I’m game. We should have done an infrastructure bill already.  The biggest challenge is how to pay for it. If the idea is getting people back to work, infrastructure will do that.    
"We need to look at infrastructure across the board to include the oil and gas sector and our ports. We know that the Port of Houston is critical. What I really want to do is to make sure that all the money we’ve pushed out the door so far is working the way we intended and we have an opportunity to fix some of the gaps, like the non-profit issue we just discussed, before we go on to do other things.”    
Mitchell then asked Sen. Cornyn to keep the coastal spine, a storm surge suppression system for the region, in mind as part of an infrastructure bill. Cornyn agreed that it was an important project.  
SBA district director provides guidance
Mitchell then questioned if the EIDL advances are available now. Jeffcoat answered, "They absolutely are.” He continued, "In many cases for businesses, it makes sense to pursue both the Economic Injury Disaster Loan, since it is for a much longer period of time and covers operating costs, as well as the PPP, because its emphasis is going to be on payroll.”   
Spence asked Jeffcoat to comment on efforts to help people with existing SBA disaster loans that they may already have. Jeffcoat’s answer included not only disaster loans but business loans as well. He said that lenders in the Houston area make SBA-guaranteed loans on a regular basis – every year over $1 billion. He said that for any business which currently has an SBA micro loan or a 504 loan, those can be deferred for up to six months. "If you have one of those, just contact your lender, and they should take care of you,” Jeffcoat advised.    
For existing disaster loans like from 2017’s Hurricane Harvey, these have automatically been deferred by the SBA until Dec. 31, 2020. For a business that might currently have a 7(a) loan, the most popular loan guaranteed by the SBA, the SBA is making the payments for these businesses whose loans are in a regular servicing status for the next six months. That began on March 27th.  
Which lenders make SBA loans?
Spence then asked for clarification on institutions that are able to make SBA loans, since there has been confusion in this regard. Jeffcoat said that in the Houston area that includes Harris County and the 31 counties around it, there are about 190 lenders working with the SBA. All of the lenders are capable of processing the PPP loans.    
As of April 9th, only about $130 billion of the allotted $350 billion has been approved. If someone’s bank is not currently making these kinds of loans, Jeffcoat advised people to go to the SBA website which has a list of lenders who are willing to take new customers who do not have an existing relationship with the lender. The website is www.sba.gov/offices/district/tx/houston. At the top of the page is a link to Coronavirus (COVID-19): Relief Options and Additional Resources where you can find lenders at https://www.sba.gov/funding-programs/loans.   
Mitchell then asked a question regarding applications for EIDL loans. Jeffcoat said that the SBA will quickly notify those who have applied for the loan that their application has been received and will provide an application number. (Editor’s Note: As of April 10th, the EIDL Program was out of funds.)
The SBA also has an Express Bridge Loan Pilot Program allowing small businesses that currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing to bridge the gap while applying for a direct SBA EIDL.    
Spence questioned Jeffcoat regarding the timeline involved from the completion of a loan application to the receipt of funds. Jeffcoat replied that the timeline differs from lender to lender depending upon which process is used. It can be as little as a few days, but he said it’s difficult to be more specific due to the process employed.   
Mitchell closed by thanking Sen. Cornyn and Jay Guerreo for their efforts in setting up the meeting, Tim Jeffcoat for his expertise, the BAHEP members who listened in on the meeting and asked questions, and finally to healthcare workers across the nation who are doing such an amazing job. 
(The video of the meeting is shown below. To view the video on full screen, click on the white headline.)

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