PPP application window closes after coronavirus talks stalemate
The application window for a small business relief package closes late Saturday, with negotiations on another relief bill at an impasse.
The Paycheck Protection Program (PPP), created as part of the March CARES Act, provides loans to businesses with fewer than 500 employees.
The application window was originally scheduled to run until the end of June. After briefly shutting down, Congress passed legislation reopening and extending the candidacy period through Aug. 8.
The program is considered one of the most successful parts of March’s $2.2 trillion bill, which also included direct payments to individuals and hundreds of billions of dollars in relief for affected sectors such as Airlines companies.
Under PPP, a business can have its loan forgiven as long as the money is used to keep employees on payroll. Congress has appropriated about $650 billion for the program.
Lawmakers have made some changes since March, including changing an initial requirement that 75% of the loan had to be used on payroll and 25% could be used on expenses such as rent at a 60-40 ratio. They also lengthened the window businesses had to spend the money while still qualifying for loan forgiveness.
Since August 6, the Small Business Administration had approved nearly 5.16 million loans for a total of $523.4 billion spent on money approved by lawmakers.
But the PPP rollout has suffered from problems, including an overwhelmed SBA website and confusion over enforcement rules.
The Associated Press reported that hundreds of millions have gone to corporations owned by major donors to President TrumpDonald TrumpThom Hartmann: Trump shut down US cyberprotections against Russia Texas County election chief resigns over botched primary Fox News poll: Kemp leads Perdue in Georgia GOP gubernatorial primary MOREand several companies with links with lawmakers have received help. Major chains have also revealed that they are able to use loopholes to secure PPP financing.
Legislators and the administration are interested in making a second tranche of the PPP. But the program is linked to wider talks over a fifth coronavirus package that collapsed with negotiators on Friday. to fail at find a compromise.
Mnuchin on Friday singled out the PPP as an area where there was “broad bipartisan agreement.”
Lawmakers want the roughly $127 billion unspent from the first round of PPP funding to be used to allow the hardest-hit small business owners to receive a second forgivable loan.
The Senate GOP package, introduced late last month, would limit funding to companies with no more than 300 employees, up from the cap of 500 workers set in March. It would also include an income test, limiting loans to businesses that have lost at least 50% of their income compared to the previous year’s quarter.
Sen. Ben CardinBenjamin (Ben) Louis CardinFor small businesses, electronic document delivery is key to reaping the full benefits of retirement modernization Defense and national security overnight – Russia should escalate war with Ukraine MORE (Md.), the top Democrat on the Senate Small Business Committee, said talks with Republicans on the program’s final language were in “pretty good shape,” but they didn’t have a deal. Cardin noted that Democrats specifically want more funds for economic disaster loans.
As the deadline for the nomination window approached, Senate Republicans would force a vote on a standalone PPP plan this week in a bid to ensure Democrats are registered. But that was scuttled by GOP infighting.
“Sen. [Ron] Johnson [R-Wis.] wanted to file an amendment to retroactively claw back money from PPP beneficiaries even if they showed a profit, which I believe would completely destroy the program,” Sen said. Marco RubioMarco Antonio RubioLegislators wary of potential oil talks with Venezuela, Saudi Arabia and Iran Foreign policy experts call for ‘limited no-fly zone’ over Ukraine (R-Fla.). “With this kind of requirement, there’s no point even having a second round.”
“There was supposed to be one, but when a few members insist on it…something that would destroy the program, it’s not even worth having that vote,” Rubio added.