Letter to Steven Mnuchin, Secretary of the Treasury, and Jovita Carranza, Administrator of the Small Business Administration - Senators Jones, Cardin and Colleagues Call for Use of Payroll Processors to Accelerate and Simplify Disbursement of CARES Act Small Business Loans

Letter

Dear Secretary Mnuchin and Administrator Carranza,

Restaurants, main street retailers, and other small businesses across the country are being forced to close their doors or severely limit their services in response to the coronavirus pandemic. Many will go bankrupt without customers, as folks stay home and practice social distancing and as states start enacting forced closures for schools and events. It is critical that all tools be used to distribute federal funds effectively and expeditiously, including payroll processing companies used by many small businesses.

The Coronavirus Aid, Relief, and. Economic Security Act (CARES) Act authorized $350 billion for the Small Business Administration to provide loans of up to $10 million. Small businesses can use the loans to maintain payroll, keep workers on the books or pay for rent, mortgage and existing debt could be forgiven, provided workers stay employed for eight weeks once they receive the loan.

The Treasury Department, in consultation with the Administrator, can allow for other organizations that do not already participate in Small Business Administration lending programs to participate in the Paycheck Protection Program.

We write to request that you allow payroll processing companies to disburse these essential funds to small businesses to reduce complications and expedite salaries to workers. In collaboration with lenders, payroll processors can play a key role in verifying payroll data to help facilitate a speedy process while also helping alleviate the risk of fraud.

Payroll processors have the needed existing infrastructure that will enable businesses to quickly pay their workers and pending bills. Given they originate approximately 40 percent of all the payroll checks in the country and mostly cater to small businesses with 500 employees or less, involving these companies will ensure a deeper dissemination of funds nationwide to the businesses that need it most to keep their doors open.

Please consider permitting payroll processors to partner with small businesses and banks to help alleviate any potential complications for many small businesses during this tumultuous time.

Sincerely,