New small business administration loan guidance appears to exclude many construction firms that employ fewer than 500 people

The chief executive officer of the Associated General Contractors of America, Stephen E. Sandherr, called on the Small Business Administration (SBA) to revise its eligibility guidelines for its new Paycheck Protection Program to make clear that any firm that employs 500 or fewer people to qualify, regardless of the average annual receipts size standard used for construction.

“Congress and the administration were clear when enacting the coronavirus relief measure that any firm employing 500 or fewer people should be eligible for the Paycheck Protection Program loans. The purpose of these loans is to keep businesses open so they can continue to operate and employ millions of Americans. Unfortunately, the Small Business Administration is needlessly delaying the loan applications of thousands of construction firms that clearly would meet the statutory threshold of 500 employers or less because the agency appears to have added a secondary qualification that is not part of the statute.

“This error appears to severely undermine the purpose of the new loan program by endangering the survival of many construction firms – the vast majority of which are family-owned businesses – that Congress intended to qualify for the program. As a result, tens of thousands of construction professionals will be forced to suffer new economic hardships because agency officials are misstating the law and subsequent eligibility guidance from the U.S. Department of the Treasury.

“We urge the President and the Administrator of the Small Business Administration to immediately clarify the eligibility standard for the program so that all construction firms that employ fewer than 500 people are able to take advantage of this measure.