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Today I’d like to talk about the federal Payroll Protection Plan or PPP, which has kept many Arkansas companies alive during the pandemic.
Congress passed the CARES Act to help Americans navigate the pandemic. PPP was one of the programs Congress authorized to assist businesses with loans. The Small Business Administration (SBA) distributes the loans through local banks.
Little Rock business owners such as Vikita Eason and Chris and Samantha Tanner say that without the loan program, they may not have survived.
Vikita was able to pay the two employees of her boutique, and she assisted the three stylists in her salon by eliminating the rent for their booth. Vikita’s landlords have allowed her to pay rent as she can and didn’t raise the rent when she renewed her three-year lease.
The Tanners own three restaurants and employ about 130 people. Mr. Tanner said that “restaurants got pounded,” and the PPP loans allowed many to keep their doors open.
The SBA lent $3.3 billion to more than 42,000 Arkansas businesses and nonprofits, which saved more than 375,000 jobs. A second round of lending opened in January and closes on March 31.
On Monday, President Biden announced his administration has established a two-week window that opened Wednesday; during this period, only businesses with fewer than 20 employees can apply for the forgivable loans.
The SBA has also implemented a loan-forgiveness program that erases the PPP debt for businesses that followed all the guidelines and spent the money for payroll, mortgage, rent, and other eligible expenses. The SBA has forgiven nineteen percent of the loans.
Representative Les Eaves and Senator Jonathan Dismang introduced a bill in the 93rd General Assembly that would exempt a forgiven PPP loan from state income tax. It has broad support. The Department of Finance says this would cut the state’s general revenue by about $33 million this year and $179 million next year. If the General Assembly passes it, I will sign it into law, and this will provide needed relief for those who have received the PPP loans.
In Arkansas, the pandemic has been another opportunity for Arkansans to help one another. As usual, many Arkansans have shown their humanity. Bankers have helped struggling business owners, and business people have assisted their employees. In the midst of the losses, Arkansans have found new ways to reach out to those in need. Arkansans have lavished compassion on one another, grace upon grace as together we hope for the end of this pandemic.
* The radio address has been updated to reflect both sponsors of a bill in the 93rd General Assembly.