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On Friday, April 24 2020, Jovita Carranza, Director of the U.S. Small Business Administration (the “SBA”), and Steven T. Mnuchin, Secretary of the U.S. Department of the Treasury, issued a statement regarding the resumption of the Paycheck Protection Program (PPP). The PPP is a program established under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), created in order to help shore up the finances of U.S. employers, who have had to suspend or reduce operations as the result of the Coronavirus pandemic.
Very briefly, applicants for relief under the program apply for a PPP loan through financial institutions, which are authorized SBA lenders and include most major U.S. banks. As indicated in another statement released on April 17, there were 1,661,367 loan applications approved for a total amount of 342 billion dollars’ worth of loans. As it turned out, the response to the program was so great that all the funding allocated to it by Congress was exhausted in only a few days. After President Trump signed, on April 24, a new spending bill into law, which provides $380 billion of additional funding to small businesses, SBA will resume receiving PPP applications from approved lenders on behalf of eligible applicants on Monday, April 27, starting at 10.30 am EDT.
Foreign owned companies also tried to take advantage of the PPP program, insofar as the law does not, on its face, exclude them. This view is supported by revisions the SBA made to the application, itself, which struck some requirements regarding U.S. citizenship and permanent residency. Despite this, apparently, it seems that initially some U.S. banks did not get the message and have de facto prevented foreign owned companies, otherwise eligible, from taking advantage of the program. In other cases, some U.S. banks, charged with implementing the PPP, required foreign-owned applicants to provide further information, which resulted in filing delays and the inability to complete the filing process. We can only hope that with this next round of funding, foreign owned enterprises will have a fairer shot at applying for PPP relief.
The important responsibilities undertaken by financial institutions in this time of trouble should remind us of the life of the well-known banker, Amedeo Giannini, whose biography, recently, was recounted in an article published in the Italian newspaper, “Il Sole 24 Ore,” under the title, “il banchiere di tutti” (meaning “everybody’s banker”). As fate would have it, Amedeo Giannini, the son of an Italian immigrant, founded a small bank in California, originally called the Bank of Italy, which later became known as the Bank of America. It was Amedeo Giannini’s ambition to support any businesses, especially if owned by people coming from a different country who desired to live and work in the U.S. His example points the way to a more inclusive and dynamic economic system for which we should all be striving.
Not providing foreign owned businesses, otherwise eligible, a fair opportunity to apply for urgently needed funds will not serve American interests. Financial institutions are now playing, as they played at the time of Amedeo Giannini, a very crucial role in leading the country into better days. Foreign owned companies only ask for the opportunity to contribute to this more hopeful future.
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