U.S. Senator Charles E. Schumer during a meeting with Finger Lakes Winery industry officials at Three Brothers Winery in Seneca County today announced his push to secure additional funding for Finger Lakes wineries hit hard by the effects of the ongoing pandemic, by including the bipartisan Emergency Injury Disaster Loans (EIDL) For Small Businesses Act in upcoming ‘COVID-4’ legislation.
The EIDL for Small Businesses Act would provide a total of $180 billion in additional appropriations for the EIDL program—$100 billion for the loan program and $80 billion for the Advance grant program—lift the SBA-imposed cap of $150,000 on EIDL loans to allow for the award to be up to $2 million, and eliminate the SBA policy of providing $1,000 per employee for the EIDL Advance grants to ensure all loan applicants receive the full $10,000 grant created by the CARES Act.
This proposal would also retroactively provide wineries that already received loans and grants from the program with the full amount they would have qualified for had the SBA restrictions not been in place. These additional funds will be awarded without the need for additional documentation.
As of mid-July, the EIDL Advance grant program ran out of funds, so small businesses are no longer able to receive this financial relief until the program is recapitalized. New York State small businesses have been awarded over $1.3 billion in EIDL Advance grants and over $16.5 billion in EIDL loans.
Hundreds of small businesses across the Finger Lakes applied and received EIDL funding before funding ran out, including approximately 120 businesses in Seneca County and dozens of Finger Lakes wineries and related tourism businesses. Schumer explained that because New York is one of the nation’s top 3 producers of wine, and with 90% of the state’s wine produced in the Finger Lakes, the region has been particularly devastated by the sharp decrease in wine tourism and restaurant demand.
“As the Finger Lakes region reopens and begins to carefully rebuild from the pandemic, the federal government should do everything in its power to bottle up additional relief for the wine producers that pour jobs into their communities and are essential to the fabric of New York,” said Senator Schumer. “Many of New York’s local vineyards are hurting from the pandemic, and the Senate must move immediately to get them the federal support they need to make it through the economic crisis.”
Schumer explained many wineries were initially blocked from receiving an EIDL loan and EIDL Advance grant because the EIDL program precluded agricultural businesses from being eligible for the EIDL program. In many cases, the SBA denied wineries and vineyards that applied on the grounds that they are agricultural businesses.
As a result, Schumer secured a provision to fix this in the ‘COVID 3.5’ interim pandemic relief bill enacted on April 24, 2020 that finally allowed agricultural enterprises, wineries, vineyards, and farms to be eligible for the EIDL loan and EIDL grant programs. By the time wineries and other agricultural businesses realized they could now apply following the ‘COVID 3.5’ eligibility fix, the EIDL Advance grant program had run out of funding and the SBA had capped loan amounts.
The senator said the current situation is dire for Finger Lakes wineries. With no end to the pandemic in sight and no guarantee of pre-pandemic levels of demand for wine in the immediate future, the EIDL program will run out of funding soon.
Schumer said Finger Lakes wineries especially rely on revenue generated by visitors that typically flock to their tasting rooms by the bus load. But current pandemic-caused visitor capacity restrictions is reducing this revenue at the same time that Wineries are forced to incur new costs for PPE and other safety upgrades.
“Without federal dollars, additional costs of PPE and safety procedures to ensure the health and safety of workers on top of already declining revenues could be crushing, especially for smaller wineries. That is why we need to take action in ‘COVID-4’ and commit to saving our Finger Lakes wineries from barreling out,” Schumer added.
As of 2019, New York’s wine industry accounted for 71,950 jobs. Additionally, the consumption of wine in New York generated $179.37 million in state and local taxes and the industry itself paid $1.12 billion in state and local taxes, totaling almost $1.3 billion for New York State and its localities in a single year. Pre-COVID, the wine industry also drew 4.71 million tourists per year, generating $1.8 billion for the surrounding region.
Jim Trezise, President of WineAmerica said, “Senator Schumer’s leadership on the EIDL program is just the latest example of his decades-long support of the American grape and wine industry. This initiative could give a real boost to small wineries that have been decimated by the Covid-19 crisis, as could the proposed RESTAURANTS Act which he strongly supports. We are very grateful for his championing of our industry.”
Details on the EIDL for Small Businesses Act appear below. The bipartisan EIDL for Small Businesses Act will:
- Provide $100 billion in appropriations for EIDL loan program;
- Provide $80 billion in appropriations for EIDL Advance grant program;
- Prohibit the U.S. Small Business Administration (SBA) from placing maximum caps below $2 million on Economic Injury Disaster Loans;
- Prohibit the SBA Administrator from placing limitations on the EIDL Advance and all eligible small business would receive the full $10,000 grant regardless of size;
- Require EIDL Advance grants to be disbursed to eligible small businesses within three business days of request and not be contingent upon approval for EIDL loan;
- Require SBA to provide current EIDL borrowers and past business recipients of EIDL Advance to receive retroactive, before caps were placed, additional support without the need for additional documentation;
- Require SBA to submit a monthly report to the House and Senate Committees on Small Business and Appropriations on 1) the status of the Disaster Loan Account, including obligations, allocations, and amounts undistributed/unallocated; 2) allocations, obligations, and expenditures for all open disasters; and 3) an estimate of when available appropriations will be exhausted.