A Lifeboat for Arizona’s Small Businesses

Small businesses are the backbone of the Arizona economy and employ over one million Arizonans. These hard-working Arizonans often put everything they have into building their businesses from scratch and provide a vast array of products, goods, and services that make our state the best place in the country to live and visit. It is crucial that we do everything in our power to ensure our small businesses, including family businesses, independent contractors, and sole proprietors, can survive the coronavirus pandemic so their businesses and jobs exist when we defeat this virus.

Unfortunately, the rapid spread of the coronavirus has created massive challenges across the United States, including in Arizona. As Americans are encouraged to stay home to flatten the curve of the coronavirus to protect the vulnerable and ensure our health care system isn’t overwhelmed, the economic impacts have been devastating.

In response, I worked with senators on both sides of the aisle to craft and pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which includes more than $2 trillion in relief to hospitals, state and local governments, tribes, small businesses, and workers who have been severely impacted by the stay-at-home directives. The main initiative of the CARES Act to help small businesses during the pandemic includes the $349 billion Paycheck Protection Program (PPP).

This program provides funds to small business owners and non-profits, including one-person businesses, self-employed individuals and independent contractors, to cover up to eight weeks of payroll and overhead costs to maintain their workforce. These funds are provided in the form of loans that will be fully forgiven when used for payroll, rent, health insurance, mortgage interest, utilities, and other qualified operating costs, meaning small business owners will not be required to go into debt to weather this virus storm. To be clear, these loans are free if used as intended.

We designed the PPP to keep employees connected to employers to the maximum extent possible and to encourage the rehiring of those who were laid off in the last few weeks. This has many benefits, including financial stability for millions of families during these uncertain times, the ability to maintain health insurance, and having a ready workforce when businesses are allowed to open and thrive again.  

Officially stood up last Friday by the Small Business Administration (SBA) and Treasury Department, the PPP has already seen the approval of roughly 400,000 loans worth more than $100 billion total. The SBA announced on Tuesday the program has already saved more than 5.7 million jobs nationwide and that number will only grow moving forward.

While the program got off to a rocky start last week with many lenders unable to process the forgivable loans, it seems to be improving every day. I encourage all lenders in Arizona to swiftly process and execute these forgivable loans without regard for the size of the business or whether they have debt with the bank or credit union. The food truck owner, dog trainer, and other one-person or very small family businesses need this lifeboat just as much as the larger ones with 500 employees. I am currently working with other senators to provide an additional $250 billion in funding to the program to ensure it supports all who qualify. In the meantime, financial institutions need to execute this quickly and without any bias.

Crucially, the PPP allows small businesses to go directly to their local lenders, credit unions, or banks to receive these forgivable loans. Since last Friday, we have already witnessed a high demand for this product. Any business that is eligible and interested in the PPP should consult their financial institution as soon as possible to start the process. If your financial institution is insured by either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), it should be able to participate. Additionally, other lenders are encouraged to apply with the SBA and Treasury to be eligible for participation in the PPP to serve a broader array of businesses.

The CARES Act also increased the scope of the Economic Injury Disaster Loan (EIDL) program by allowing businesses to apply for up to a $10,000 advance that is also eligible for forgiveness. The up to $10,000 EIDL advance grant is available to businesses after a successful application is made, even if a business is ultimately turned down for an EIDL loan. Remember, the EIDL advance will not have to be repaid. The PPP and EIDL programs can be used in tandem, and deciding what option is best for each business will require careful consideration by the business owner. Visit https://www.sba.gov/funding-programs/loans/coronavirus-relief-options to fully understand each option.

Both the PPP and improvements to the EIDL advance were created to be available to as many small businesses as possible. If you are self-employed, if you are relatively new and have only a handful of employees, or if you are an independent contractor, it is likely that you are eligible and could benefit from either the PPP, the EIDL, or perhaps both.  

Small businesses interested in applying for an EIDL advance through the SBA should visit https://covid19relief.sba.gov/#/, with additional instructions available at https://www.sba.gov/sites/default/files/resource_files how_to_disaster_app_March_2020.pdf. As noted above, businesses that have decided the PPP is the best option should consult their financial institution as soon as possible.  

The coronavirus pandemic has resulted in wide and deep negative economic effects across Arizona. I will continue to work with local and federal leaders to ensure Arizonans have the resources they need to get to the other side of this crisis. We are blessed to live in the greatest country in the world and the best state in the nation. Together we will defeat this virus, survive, and recover.

If you are in need of assistance with a federal agency, do not hesitate to reach out to one of my offices. You can contact my Phoenix office by calling (602)952-2410 or you can also call my Tucson office at (520)670-6334.


Senator Martha McSally has served as one of Arizona’s United States Senators since 2019, occupying the seat formerly held by Senator John McCain.

Photo courtesy of Joshua Roberts/Reuters.

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