President Donald Trump on Saturday signed off on an extension of the paycheck protection program (PPP), giving small businesses an additional five weeks to apply for loans that are designed to provide them with payroll and expense relief amid the pandemic.
This comes after the House unanimously voted to extend the deadline for small businesses to apply for the potentially forgivable loans a day after the original deadline for new applications had expired. Small businesses now have until Aug. 8 to apply for the loan.
Approximately $130 billion allocated funding has still not been used as of June 30. The $670 billion PPP was created by Congress in March to provide pandemic relief to small businesses with 500 or fewer employees. These loans are forgivable if the businesses use funds for payroll costs and expenses such as interest on mortgages, rent, and utilities.
Over 4.8 million loans have been granted, totaling more than $520 billion, according to the Small Business Administration (SBA).
Lawmakers are currently negotiating ways on how to repurpose the leftover funds that would help smaller, hardest-hit businesses to tap into a more targeted second round of assistance. Senate Democrats have introduced a bill to provide small businesses to take out a second loan if they have 100 employees or less, including sole proprietorships and self-employed individuals, and have used up an initial PPP loan, or be on pace to exhaust the loan. They must also show that they have suffered a revenue loss of 50 percent or more due to the pandemic.
Similarly, Sen. Marco Rubio (R-Fla.), chairman of the Senate Small Business Committee, told reporters on June 30 that he is working on a more targeted approach for the $130 billion.
“My preference is that we hold on to the $130 billion that was in use and rather than having a revert, using that to fund a second round of assistance to small businesses. Obviously we’ll have to be more targeted at truly small businesses and, in addition to that, I’m also developing a program to provide financing for businesses in under served communities or opportunity zones and other zip codes that would fall in that category,” Rubio told reporters. “I’m very concerned that a lot of minority businesses, particularly black-owned businesses already struggling to begin with, have access to capital.”
Treasury Secretary Steven Mnuchin testified during a congressional hearing on June 30 bipartisan support in the Senate to repurpose the $130 billion for PPP and to target the most hard-hit businesses.
“I think that there’s, there appears to be bipartisan support in the Senate to repurpose the $130 billion for PPP, extending it to businesses that are most hard hit, that have a requirement that their revenues have dropped significantly—things like restaurants and hotels and others, where it is critical to get people back to work,” Mnuchin said.
The SBA’s inspector general said in a report (pdf) released in May that some rural, minority, and women-owned businesses may not have received loans as intended because the agency did not provide guidance about the prioritization of these borrowers.
From The Epoch Times