House Clears Extension of Small Business Loan Program to August
(Bloomberg) -- The House gave final last-minute congressional approval Wednesday to extending the popular Paycheck Protection Program for small businesses until Aug. 8, hours after the deadline for applications lapsed with more than $130 billion still available.
The Senate had passed the extension Tuesday, shortly before the Small Business Administration was to stop accepting new loan applications at 11:59 p.m. Both chambers used expedited procedures to send the bill to President Donald Trump, who was expected to sign it, according to a person familiar with the matter.
The PPP program was enacted in March as part of the $2.2 trillion coronavirus relief package. The extension measure is S. 4116.
The $669 billion program approved more than 4.8 million loans totaling $520.6 billion by Tuesday night, the SBA said. The $134.5 billion that remained as of Saturday would eventually have been returned to the Treasury if Congress didn’t extend the program.
Even as lawmakers agreed to extend the current program, members of both parties were demanding more detailed information on how the funds have been spent so far. Others are proposing modifications or calling for new initiatives to help companies that are hardest hit by the pandemic or excluded from PPP.
U.S. Senate Passes Extension of Small Business Loan Program
Small business advocates said they expect those ideas to be part of negotiations on a broader economic stimulus bill later in July.
Treasury Secretary Steven Mnuchin told a House committee Tuesday that the Trump administration supports enacting additional stimulus legislation by the end of July. He said he’s had discussions with the Senate about revising PPP to help restaurants, hotels and other hard-hit businesses.
This week’s scramble to extend the program came as Congress prepares to leave on a two-week recess amid a worsening economic outlook because of a resurgence of the coronavirus.
Maine Republican Senator Susan Collins said Wednesday that bipartisan negotiators are close to a deal on a revival of the paycheck protection program. She is urging Congress to enact a second round of forgivable loans for companies after their revenue dropped by 50% or more compared to last year. To stretch the remaining PPP funds, she said she supports limiting the loans to businesses with 300 or fewer employees.
Senator Marco Rubio, a Florida Republican and the chairman of the Senate Small Business Committee, said he’s considering allowing chambers of commerce to apply for PPP funds and setting funds aside for businesses with fewer than 10 employees.
Senator Ben Cardin of Maryland and other Senate Democrats have introduced a bill to allow a second loan for borrowers with fewer than 100 employees that lost at least half of their revenue because of the pandemic.
Similar bills are being negotiated in the House.
Representative Nydia Velazquez, chairwoman of the House Small Business Committee, said lawmakers and the public need to see how PPP funds have been used and how the smallest and most disadvantaged companies have fared. Velazquez and other lawmakers have been demanding data on the loans from the SBA and Treasury, which jointly run the PPP.
Mnuchin and SBA Administrator Jovita Carranza initially refused to provide the data on grounds it involved private company information. But they wrote to lawmakers last week saying they expected to provide the data by the end of this week.
Even as lawmakers are seeking changes or improvements, supporters credit the current program with keeping tens of millions of workers employed during the pandemic and contributing to the surprising increase of 2.5 million U.S. jobs in May.
But potentially millions of small business owners didn’t use the program because of concerns about standards they needed to meet to ensure the loans would be forgivable, they weren’t aware of the program or were unable to access it.
©2020 Bloomberg L.P.