AFS joined more than 200 national and state-based trade groups in a letter to congressional leadership today calling on Congress to increase funding for Paycheck Protection Program (PPP) loans.
According to the Small Business Administration, banks have already committed most of the $349 billion allocated for this loan program to capitalize the PPP, and it is likely the program will run out of money within the week.
The PPP and CARES Act provide financial assistance to companies, including small and mid-sized metalcasters, whose business has been affected by COVID-19. PPP would provide loans to employers with 500 or less employees (or in the case of iron and steel investment foundries up to 1,000 employees) who continue to pay their employees. The loan would cover 8 weeks of payroll expense. In the end, the loan would be forgiven via what would essentially be a federal government grant. All loans have a 1% fixed interest rate, require no collateral or guarantor (meaning owners don’t need to put anything down to back the loan) and will be due in two years with no prepayment penalties or fees. Loan payments will also be deferred for six months; during that time, interest will accrue.
“The PPP has emerged as a central and effective response to the economic damage resulting from COVID-19,” the letter reads. “PPP loans are providing a vital source of liquidity to more than a million individually and family-owned businesses whose operations have been curtailed or shut down by stay-home orders and other government actions taken in response to the virus. These businesses, in turn, are using the loans to keep millions of Americans employed.”
Numerous U.S. metalcasters have continued to manufacture castings, as many have been deemed essential during the pandemic, with some even changing their production schedules to produce parts for much-needed health care equipment. However, some metalcasters have applied for these PPP loans or are in the process of filing.
To read the full letter, click here.