Rockland Chef Melissa Kelly testifies virtually for Congressional committee on PPP loans

Thu, 06/18/2020 - 12:30pm

WASHINGTON, D.C. — Melissa Kelly, a well-known chef and small business owner, testified virtually for a U.S. Congressional committee Wednesday as the committee hosted a remote hearing examining the Paycheck Protection Program’s impact on small businesses.  Kelly is the executive chef and proprietor of Primo Restaurant, in Rockland.

The U.S. House of Representatives Small Business Committee specifically held the hearing to learn about the issues borrowers and lenders have faced in applying for, and using, the PPP loans. Namely, the Committee focused on the use of proceeds that will qualify borrowers for full loan forgiveness. 

“Members will also have the opportunity to hear about what has generally worked with the program, what has not, the changes Congress has recently made to the program, and suggestions to continue optimizing the program,” a description of the meeting stated. 

The June 17 session was the second remote hearing for the Committee, and each witness was allowed five minutes to provide a statement with each committee member then provided five minutes to ask questions of the witnesses. 

The committee includes representatives from Oklahoma, Ohio, American Samoa, New York, Iowa, Maine, New Jersey, Colorado, Florida, Tennessee, Minnesota, Kansas, Maryland, California, Pennsylvania, Illinois and North Carolina. 

After calling the meeting to order, Committee Chairwoman Nydia Velázquez, of New York, noted it is imperative for the Committee to identify problems with the PPP program so that the issues can be corrected now, and for any potential future uses. 

Other witnesses included a senior vice president of a bank with experience in providing SBA loans, a director from the Center for Responsible Lending and the owner of an Ohio animal hospital. 

Kelly was able to open her restaurant in Rockland thanks to an initial loan from the Small Business Association, Rep. Velázquez noted when introducing Kelly. 

Kelly said she was not only was testifying for herself and her staff, but for the entire restaurant and hospitality community. 

She said that while she had emergency funds she could tap into for employee salaries at the beginning of the pandemic, she was concerned how quickly those funds would be drained.

Upon hearing about the PPP loan, she was interested, though disappointed at how the program was established. 

As a seasonal restaurant, more employees are on board during more peak months. The PPP loan requirements were based on her current count of employees at the time of the application, however, forcing her to claim a reduced number of employees than she actually has during the season.

Eligible expenses to be covered under the PPP loan, Kelly noted, are limited and many of her COVID-19 related expenses are not being covered by the loan.

Kelly was concerned with the loan’s limited time frame for spending the funds, causing concern and fear for Kelly she may not spend the funds in ample time and not have a portion of the loan forgiven.  

During the question-and-answer period with committee members, Kelly noted she has been able to retain 16 of her employees thanks to the PPP loan. At this time, she noted her establishment is not open for indoor dining but she is in the process of building an outdoor dining area and will bring back additional employees in the near future as she cautiously reopens her restaurant for indoor dining.

In response to another question, she indicated that it is important to amend the PPP to provide more funding for those in the restaurant and hospitality business. 

“Our industry is in a crisis,” she said, noting small communities around the nation could lose restaurants without more support from the federal government. 

Responding to a question from Maine Rep. Jared Golden about what assistance the federal government can provide to help prepare owners like her for the next step in recovery, Kelly noted the next six months are very unknown considering she usually is preparing for her July-October peak now.

Extra financial opportunities for her business, such as catering weddings, is off the table for this year. She also noted the additional $600 unemployment money to workers has been a Catch-22 as some employees throughout the industry are not eager to return to work when they are able to instead collect the unemployment funds. 

Asked to elaborate on the unique challenges of being a seasonal business, Kelly noted it is daunting to be in such an uncertain position thanks to the pandemic.

It is imperative, she said, to expand the PPP as it could be result in the survival of small businesses that rely on a specific window of time for the peak of their businesses. 

Without providing more assistance in the very near future, Kelly noted, the entire year could be a complete wash for small businesses in the hospitality industry.  

Responding to a pair of questions about solutions the SBA could implement to better the PPP moving forward, Kelly noted the PPP Flexibility Act (PPPFA), designed to give borrowers more flexibility and time to spend the PPP loan proceeds was helpful, but the SBA should revisit the details of increased funding.

With the pandemic lasting longer than initially anticipated, Kelly wished she could receive additional loan funding though was denied that opportunity due to how the process of the program was established by the SBA. 

Kelly, in response to another question, noted aside from change to the PPP program and support from the federal government, small businesses need a clear understanding of the program rules so that no small business owners live in fear they are breaking the rules without realizing a rule is being broken. 

Asked to address what she feels is the biggest challenge of getting the loan forgiven by the SBA and how she is tracking how the loan money is spent, Kelly noted she established a new bank account to track all the loan funding.

She noted, however, she has feared a portion of her loan will not be forgiven due to not being able to meet some of the requirements for the number of employees she is to support financially with the loan. This particular requirement was difficult to meet, she said, due to the shutdown of indoor dining. 


Reach George Harvey at: sports@penbaypilot.com