Van Hollen, Cardin Urge Hogan to Enlist Federal Resources to Help Maryland Small Businesses with Coronavirus Preparedness & Response

Following final passage of the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, U.S. Senators Chris Van Hollen and Ben Cardin (both D-Md.) today sent a letter to Maryland Governor Larry Hogan urging him to make use of the federal resources available for coronavirus preparedness and response related to public health, as well as affected small businesses. The senators’ letter follows recent announcements that five Maryland residents have tested positive for the virus, as well as the governor’s declaration of a state of emergency.

“Unlike large corporations that have the capital reserves necessary to overcome an extended disruption, small firms operate on narrow margins and may not be able to survive a temporary decline in revenue,” the senators wrote. “A restaurant experiencing a sudden loss of foot traffic or a manufacturer that can no longer access its suppliers abroad cannot simply wait and hope for the best. To remain up-to-date with creditors and continue to keep employees on their payrolls, small businesses will need access to affordable capital.”

In addition to much needed funding for the National Institutes of Health and the Centers for Disease Control and Prevention, the supplemental funding package includes funding to help small businesses obtain low-interest disaster loans through the U.S. Small Business Administration (SBA). The bill also makes the coronavirus an eligible disaster type under the Small Business Act, which allows SBA to approve a request for disaster declaration from a governor’s office, so businesses in and around the region covered by the declaration can qualify for Economic Injury Disaster Loans; the loans, which offer lower interest rates than private loans, can be used to keep a business afloat when it is unable to obtain credit elsewhere.

The senators continued, “We also encourage you to closely monitor the effect this crisis has on our small businesses, noting areas and sectors experiencing economic hardship and gauging the need for additional support from both the state and federal level.”

The full letter is available here and below:

Dear Governor Hogan:

As you know, Congress recently passed and the President signed the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, which provides $8.3 billion to respond to the novel coronavirus (COVID-19) outbreak. Congressional action has come none too soon for our state: with five cases now reported and several other individuals being tested, the threat to Maryland is no longer theoretical. In addition to much needed funding for the Maryland-based National Institutes of Health and the Centers for Disease Control and Prevention, the bill also includes additional funding to help small businesses obtain low-interest disaster loans through the Small Business Administration (SBA). Both of us—one the Ranking Member of the Senate Small Business Committee and the other a member of the Senate Appropriations Committee—were heartened to see that Congress stood behind the nation’s small businesses and provided resources to help them weather the economic downturn resulting from this serious public health emergency.

Unlike large corporations that have the capital reserves necessary to overcome an extended disruption, small firms operate on narrow margins and may not be able to survive a temporary decline in revenue. A restaurant experiencing a sudden loss of foot traffic or a manufacturer that can no longer access its suppliers abroad cannot simply wait and hope for the best. To remain up-to-date with creditors and continue to keep employees on their payrolls, small businesses will need access to affordable capital. Fortunately, Congress included language in the emergency appropriation making the coronavirus an eligible disaster type under the Small Business Act. This means that when the SBA approves a request for a disaster declaration from a governor’s office, businesses in and around the area covered by the declaration can qualify for Economic Injury Disaster Loans. These loans can be used to keep businesses afloat when they are unable to obtain credit elsewhere.

We are writing today to urge you to be proactive in reaching out to SBA and to use your authority to seek help for Maryland small businesses threatened by the coronavirus. As SBA issues guidance on the availability of loans to businesses affected by the coronavirus, we hope you will ensure that Maryland takes advantage of the resources Congress has provided as expeditiously as possible. We also encourage you to closely monitor the effect this crisis has on our state’s small businesses, noting areas and sectors experiencing economic hardship and gauging the need for additional support from both the state and federal levels.

Please let us know if we can be of any assistance to you as you coordinate with our federal agencies to help Maryland respond to this outbreak. Thank you for your attention to this important issue.

Sincerely,