The Trump Administration’s Paycheck Protection Program—a facility intended to prop up small businesses with forgivable loans during the worst of the pandemic—is closing its application window after three months; with $134 million in funds still available and new coronavirus infections spiking across the country, lawmakers have yet to decide what’s next.
Confusion over loan forgiveness requirements—and over how the program works in general—could be deterring businesses from applying for the remaining $134 billion, a CNBC report suggested earlier this month.
Congress is currently debating how to use that leftover money; one popular Democratic proposal involves allowing smaller businesses to take out a second loan.
Staff for Sen. Marco Rubio (R-Fla.) have said a bipartisan task force is working on the next legislative step to provide relief to small businesses, the Wall Street Journal reported Tuesday.
Technical glitches, confusing guidelines and a bitter backlash over large public companies—like Shake Shack and Ruth’s Chris Steak House—receiving multimillion-dollar loans marred the PPP’s first weeks.
Months later, however, the PPP is considered to be a major force behind May’s surprising job gains, when the U.S. added 2.5 million jobs instead of the loss of 9 million that most experts were expecting.
“We’re open-minded, but we absolutely believe small businesses, and by the way, many big businesses in certain industries, are absolutely going to need more help,” Treasury Secretary Mnuchin said during a Senate hearing on June 10. He also suggested that the next round of aid would need to be “more targeted” to specific industries.
As of June 27, nearly 4.8 million PPP loans had been approved. All in, those loans were worth a total of $519 billion.
The CARES Act, signed into law by President Trump at the end of March, established the $350 billion Paycheck Protection Program, which would provide forgivable loans to cover payroll and overhead expenses and hopefully keep mom-and-pop shops from folding. The program ran out of money in just two weeks after an initial rush of applications. Congress then passed new legislation to restart the program with another $310 billion, with $60 billion of that money reserved for smaller businesses without existing banking relationships. Earlier this month, Congress passed a bill relaxing forgiveness requirements for the loans.
Mnuchin Pushes For More Coronavirus Relief Spending As PPP Hailed As A Success (Forbes)
Demand For The Paycheck Protection Program Is Drying Up (Forbes)
House Passes Bill To Give Small Businesses More Flexibility In Spending PPP Loans (Forbes)
Five Numbers That Sum Up The Troubled PPP Program (Forbes)