April 3, 2020

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Support for Saving Startup Jobs Keeps Growing as Defense Dept., More Members of Congress Weigh in on SBA “Affiliation Rules”

Washington, D.C. — With banks and other lenders across the country set to begin accepting loan applications today for the Paycheck Protection Program (PPP) authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, support continues to grow for saving startup jobs nationwide by addressing the Small Business Administration’s (SBA) “Affiliation Rules.”

A decision by the Trump Administration is expected at any time, as the interim final rule published by the SBA yesterday said, “SBA intends to promptly issue additional guidance with regard to the applicability of affiliation rules at 13 CFR §§ 121.103 and 121.301 to PPP loans.”

“In the week since the CARES Act was signed into law, the pervasive uncertainty surrounding this issue has already resulted in major layoffs of startup workers across the country,” said TechNet President and CEO Linda Moore.  “America’s startups can be found in every state and are vital engines of job creation and innovation, but the approach with our startups so far stands in sharp contrast to other countries like France and Germany that have made supporting their startups a priority.

“The purpose of the Paycheck Protection Program is to save jobs, but with so many startups on the frontlines of developing solutions to combat the coronavirus, throwing them this lifeline and ensuring that their work can go on will also have the added benefit of helping our nation confront this public health challenge,” Moore added. “We continue to urge the Administration to act immediately and are hopeful they will soon provide the clear guidance needed so that startups can access the emergency loan program and save jobs.”

Momentum for the Trump Administration to act has been building:

  • Over the past week, Members of Congress have also weighed in: Representative Anna Eshoo led a bipartisan 19-House member letter last Friday; Speaker Nancy Pelosi (D-CA) and Ro Khanna (D-CA) sent a letter to the U.S. Treasury and SBA; Representatives Josh Gottheimer (D-NJ), Tom Reed (R-NY), Jason Crow (D-CO), and Cathy McMorris Rodgers (R-WA) sent a bipartisan letter; several members sent individual letters, including Representatives Guy Reschenthaler (R-PA), Brian Higgins (D-NY), and Earl “Buddy” Carter (R-GA); and there have been various Senate letters advanced by Senators Chuck Schumer (D-NY), Ben Cardin (D-MD), Chris Coons (D-DE), Bernie Sanders (I-VT), Jerry Moran (R-KS), Steve Daines (R-MT), Mark Warner (D-VA), Susan Collins (R-ME), and Kamala Harris (D-CA); among other efforts.
  • On Tuesday, the Information Technology and Innovation Foundation (ITIF) released a new study warning that if the Trump Administration does not waive the SBA’s Affiliation Rules, the total impact of job losses will be more than 1 million job losses, including about 279,000 direct layoffs.  The full report can be read here.
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