The emergency coronavirus relief program for small businesses is set to stop accepting new applications just before midnight, having approved about $520 billion in forgivable loans as of Monday — but leaving more than $130 billion in funding left untapped.
Lawmakers are considering how to repurpose the remaining money from the expiring Paycheck Protection Program to deliver more aid to businesses. The Washington Post reports:
“Sens. Marco Rubio (R-Fla.) and Ben Cardin (D-Md.) are leading a group considering how best to use the remaining funds to help small businesses as they begin to reopen. The issue is not expected to be resolved, however, until the Senate gets to work in late July on what Majority Leader Mitch McConnell (R-Ky.) has said will be the final major coronavirus relief bill.”
Treasury Secretary Steven Mnuchin said Tuesday that the Trump administration supports the idea of using the money to help businesses hit hardest by the pandemic, including restuarants and hotels. "I’ve already had conversations with the SBA committee in the Senate about re-purposing that $135 billion and think that should be done, and look forward to working with both the House and the Senate so we can pass legislation by the end of July,” Mnuchin said, according to the Post.
A draft copy of Rubio-led legislation obtained by the Post would expand the possible uses for the money and would dedicate $25 billion to businesses with fewer than 10 employees. It would also prevent hotel and restaurant chains from receiving more than $2 million.
Democrats, meanwhile, have proposed extending the application deadline by six months and targeting the new funds to businesses with 100 or fewer employees and those hurt most by the virus.
Rubio said that there may be better ways to use the money than extending the current PPP program, which, despite a chaotic rollout and frustration from some borrowers and lenders, has provided money to nearly 5 million businesses and helped mitigate or reverse some of the labor market devastation caused by the pandemic shutdowns.
“PPP has been widely successful. There are more companies that could benefit from it. It would be great if extending the deadline would help them. But my sense is the greater need right now is in companies that have received that assistance but now need new or different kinds of assistance,” he told the Post.
Why it matters: “Small businesses employ about half of America’s nongovernment workers, and a fresh wave of deep reductions or permanent closures would quickly cascade through the national economy,” Stacy Cowley writes at The New York Times. “The pain would be even more acute in hard-hit industries, like the service sector, and communities that disproportionately rely on small employers.”