$3 for 3 months. Save 90%.
$3 for 3 months. Save 90%.

Why Michigan GOP congressman took PPP loan for his small business

Melissa Nann Burke
The Detroit News

U.S. Rep. Bill Huizenga's gravel business in West Michigan received a $27,500 forgivable loan through the federal coronavirus program aimed at helping companies avoid layoffs during the pandemic.

Huizenga, who co-owns the company with a cousin, said the aid through the $659 billion Small Business Administration's Paycheck Protection Program allowed them to keep all four employees on the payroll while operations were shut down for six weeks due to Michigan Gov. Gretchen Whitmer's executive orders. 

"No one knew how long this was going to be or what it would look like.I quite honestly couldn’t fathom that Michigan wouldbe the last state in the nation to reopen construction," the Zeeland Republican said in an interview. 

FILE -- Congressman Bill Huizenga speaks during the first-ever Michigan Congressional defense tour of Michigan's military installations at the Battle Creek Air National Guard Base in Battle Creek on Sept. 3, 2015.

He and his cousin faced a decision like many other business owners at the time: Should they lay off their employees or try to retain them?

"We made the decision to keep them on payroll, even before the PPP program had even started. We took a little bit of a risk on that but wanted to do right by these guys," he said.

"These people are family. We’ve got long-term relationships with them, and we wanted to take care of them."

Michigan had the nation's third highest unemployment rate in May at 21.2%, trailing Nevada and Hawaii. 

Huizenga Gravel operates at a 180-acre property in Jenison where workers dig up dirt and process it to produce sand and gravel for use in ready-mix concrete, brick mortar or landscaping stone. Their season typically runs from April through deer-hunting season.

Once the PPP program went live, the company accountant was calling and saying, "You need to do this," Huizenga recalled. 

Members of Congress and their families are not prohibited from receiving loans under the PPP program.

Huizenga said he had no reservations applying for coronavirus aid from a program he voted to create in Congress. 

"Because I knew this was the right policy that was going to be helping people. I understand there’s is scrutiny on everything we do, but this was something that was so pervasive, so widespread," he said referring to the economic impact of the pandemic.

"Let’s be honest: My $27,000 is not an insignificant amount of money. Spread out among four guys getting payroll, this is hopefully going to cover our costs. It's not millions of dollars. This was keeping our guys employed and keeping ourselves afloat."

"Also, this wasn’t just me," he added. "I own half the company. How do I look at my cousin and say, 'Hey, dude, sorry we’re going to get a little attention on this, so you can’t take part in something that all of our competitors and everyone we work with and for are doing'?"

The Associated Press reported this week that at least a dozen other lawmakers had links to organizations that received PPP loans, according to data released this week by the U.S. Treasury. They included Republicans and Democrats. 

The Treasury disclosed 15% of the 5 million companies and organizations who got assistance, identifying only those who received more than $150,000. The largest loans were for $10 million. 

Huizenga's business was not among those named by the Treasury Department because it received less than $150,000, but the congressman agreed to speak about the loan after The Detroit News contacted his office. 

A separate Michigan business, Huizenga & Sons in Zeeland, received a PPP loan valued at $150,000 to $300,000, according to the Treasury data.

That company was started by Huizenga's grandfather, father and uncle, but now has a different ownership structure. Rep. Huizenga said he does not have a stake in it.  

The congressman said Huizenga Gravel's $27,500 loan was calculated based on a formula using 2.5 times the company's monthly payroll. He said the federal money was used entirely for payroll expenses.

Huizenga himself does not draw a salary from the business and did not personally receive any of the coronavirus aid, he said. 

PPP loans, which are made by lending institutions, may be forgiven if employers maintain or quickly rehire employees over an eight-week period. The cash is to be used for payroll costs, interest on mortgages, rent or utilities.

Huizenga framed the PPP program a huge success for the country, noting that in West Michigan alone the loans helped retain 250,000 jobs, keeping people off of unemployment rolls. 

Nearly $16 billion in loans were approved for more than 120,000 Michigan businesses and organizations through the end of June, according to the Small Business Administration.