Congress Expands Paycheck Protection Program; Billions remain available
Congress has extended the deadline for small businesses to apply for approximately $ 134 billion in paycheck protection program funds to August 8.
The House of Representatives unanimously approved the extension on Wednesday evening. Unexpectedly, the Senate initiated the process and also voted unanimously for the extension on Tuesday evening. Now the renewal bill will go to President Donald Trump’s desk. The president has not yet announced whether he will sign it, even though his government has loudly supported the program.
Efforts come with PPP funding pending. The application portal closed for small business owners at 11:59 p.m. on Tuesday, the original application deadline for the program. If Trump agrees to the extension, business owners will have access to the forgivable loans again.
The PPP is a cornerstone of the government’s plight Coronavirus Economic aid plan. Nearly 4.8 million loans were made to small businesses that were shut down due to the pandemic, totaling more than $ 518 billion, according to the Small Business Administration. The loans are forgivable if companies meet some guidelines, including using 60% of the loan to keep employees on payroll.
Despite the program’s success, the fact that it was unclaimed for more than $ 100 billion reveals certain shortcomings. Especially for many small businesses run by sole proprietorships or in economically disadvantaged areaswho may not have access to accountants or may not have any experience in obtaining credit, the process to get PPP funding has been and is daunting. Other small businesses were reluctant to apply for the loans as forgiveness guidelines changed several times and the ongoing pandemic meant many businesses felt they couldn’t meet the 60% salary threshold.
For restaurants in particular, PPP was not a slam dunk. As COVID-19 cases rise across the country, these companies are forced to close again, affecting the entire supply chain. The crisis prompted a restaurant lobby group to re-urge Congress to approve a $ 120 billion restaurant revitalization fund in addition to PPP.
In a letter from ABC News, more than 200 restaurant suppliers and trade groups, including Pat LaFrieda Meat Purveyors and Bacardi, urge congressional leaders to adopt the RESTAURANT Act, which would give grants to restaurants that are not publicly traded and have less than 1, $ 5 million in annual pre-pandemic sales. The effort is led by the International Restaurant Coalition, an advocacy group whose leadership team includes celebrity chef Jose Andres.
“Since the mandatory restaurant closings in the United States, we have seen an almost complete collapse in the market for our goods. We were forced to lay off thousands of workers – ranch workers, pharmacists, lobsters, farmers from every state in the country. ”“ The letter reads. “If small restaurants are not directly relieved, they will close in debt and related industries will fail – permanently.”
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While the money is still needed, it won’t simply be reabsorbed or transferred to other SBA programs, the agency said. Congress must decide how to reappropriate.
“Congress and the administration will consider proposals for how the remaining funds will be used. The dollars allocated to the PPP will not go into regular SBA 7 (a) loan funding (the SBA loan program that existed prior to COVID) or any other SBA program broadcast, ”a regional SBA spokesman told ABC News.
Senator Marco Rubio, R.-Fla., Chairman of the Senate’s Small Business Committee, is currently working on reshaping the program after the current extension.
“I prefer we keep the $ 130 billion that we used and not return it to fund a second round of small business support. Of course, we need to focus more on really small businesses, and “I’m also developing a program to fund businesses in underserved communities or opportunity zones and other zip codes that would fall into that category,” said Rubio on Tuesday. that many minority companies, especially black-owned companies that struggle to begin with, have access to capital. “
Senator Ben Cardin, D-Md., The senior member of the Small Business Committee, has proposed a bill that would allow the smallest of small businesses to receive a second round of PPP funding and the application deadline by December or whenever Small. to extend Business economist Jovita Carranza sees it as right. The idea is to reach out to the companies that still need help: minority-owned companies, companies with fewer than 100 employees, and industries like hospitality and retail that have yet to bounce back from receiving the first round of PPP loans.
Treasury Secretary Steven Mnuchin testified Tuesday that there is bipartisan support to expand PPP and target the hardest-hit companies. He said the legislation is expected by the end of July, which means the program will be canceled from July 1st until it is passed.
“I think there seems to be bipartisan support in the Senate to recycle the $ 130 billion in PPP and expand it to companies that are hardest hit and whose revenues must have plummeted – things like restaurants and hotels and others, where it’s crucial to get people back to work, “Mnuchin said.
“I have already had discussions with the Senate SBA committee on the reallocation of this hundred $ 135 billion and I think it should be done and I look forward to working with the House and Senate to ensure we have by the end of July Be able to pass laws, “he said.
ABC News’ Trish Turner and Mariam Khan contributed to this report.