The Small Business Administration’s Paycheck Protection Program has expired.
The program has enabled many small businesses to keep their employees on the payroll. The expiration of lending authority could now trigger wide-spread layoffs, some of which have already begun.
One former Ocean Park employee said: “I just don’t know. We need help. We don’t know what to do now. It’s crazy.”
Another said: “The pay we got is probably going to hold us off for a while, but it’s not going to last. And with this situation, I want to make sure we can qualify for unemployment.”
These two young men, who did not want to be identified, were terminated from their jobs yesterday at Guam Ocean Park, a beachside water sports rental business in Tamuning. They were given termination letters under which their employer explained that the Paycheck Protection Program funding that the company had received has now run out
“It tells us that the grant, they don’t have any more funding, so they can’t keep us,” the employee said.
The PPP program is administered by the Small Business Administration and Ken Lujan is the branch manager of Guam’s SBA office.
“The PPE money was only good for about 8 weeks which is 4 pay periods. It’s not possible for these businesses to apply for another PPP loan. The PPP expires 12 o’clock midnight eastern standard time which is probably less than two hours from now,” Lujan said.
Lujan says there’s still $120 billion authorized for the program, but the authority to spend it has expired.
“There is still 120-plus billion dollars remaining in the pot and not all of it was utilized. But then the program in the pot … by law the program expires on June 30,” he said.
Lujan says it’ll take a reallocation of money or a re-appropriation of funds to continue the PPP program. Congress thought two months would be enough to allow small businesses to adjust to the crisis and re-open and no one thought it would last this long.
“If businesses do not have necessary reserve funds that they need to sustain themselves throughout this pandemic during this period of time, the uncertainty is when is it going to end? Eventually, you’re going to see them having to take drastic measures, having to reduce costs and, of course, the first area that any business reduces costs at is employee salaries. So we can expect to see more of these,” Lujan said.
The former Ocean Park employee said: “Something’s going on with my employment. I don’t even know. I’ve been calling and no answer. I’ve emailed them and no reply. I don’t know how long I’m going to be able to hold out.”