I'm writing today to inform you that we responded to your collective concerns about lower middle market companies that could be excluded from relief provided under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Martin Okner and I sent a letter to Secretary Mnuchin and Administrator Carranza late last evening. Please share it via social media to amplify our concerns.
Also of note the group consensus: Congress passed CARES and with it the Paycheck Protection Program – aimed at getting money in the hands of small businesses to pay workers. The SBA is the channel to pump $350 billion PPP funds in relief over the next six weeks (SBA typically processes $30 billion annually). There is an emergency lens and political lens that the agency is operating under, and there are general concerns about the risk of fraud because of the expediency with which the agency needs to operate. However, now is not the time to be bureaucratic.
No one reported push-back from Treasury or SBA. Generally, everyone appreciates Congress intention to get money in the hands of workers. SBA admittedly has no understanding of VC or PE and the NVCA is educating the SBA on different types of investment and is using its model legal documents to help them understand.
And there was concern expressed about investors in sport franchises lobbying for relief is poor form. It's simply not the right time.
Thank you for your time, attention and action.
Tom Bohn, CAE, MBA
President & CEO