The Small Business Administration, which ran PPP with the Treasury Department, stops accepting new applications at 11:59 p.m. New York time tonight for the $669 billion program that had approved more than 4.8 million loans totaling $519.6 billion as of Monday night, SBA said. There was $134.5 billion remaining as of Saturday that will be returned to Treasury unless Congress re-purposes it.
Rubio told reporters on Tuesday his preference is to use remaining PPP funds for a second round of assistance targeted at the smallest of firms and those in underserved communities.
“Our hope is that we can use that as the sort of foundation for building a second round of assistance in a more targeted way,” Rubio said.
Rubio is considering legislation that would create new programs with expanded uses of PPP funds, including allowing chambers of commerce to apply, setting aside $25 billion for businesses with fewer than 10 employees and directing funds to firms that prove they were affected by the pandemic, according to his office. The details were reported earlier by the Washington Post.
Senator Ben Cardin of Maryland, the top Democrat on the small business committee, and other Senate Democrats have introduced a bill that would extend the PPP application deadline to Dec. 31 or longer while creating a new option for a second loan for borrowers with fewer than 100 employees that have lost at least half their revenue due to the pandemic. Similar bills are being negotiated in the House, and small business advocates expect those ideas to be part of negotiations on a broader stimulus package in July.
Treasury Secretary Steven Mnuchin said in testimony before the House Financial Services Committee on Tuesday that the Trump administration supports working with the House and Senate to pass additional stimulus legislation by the end of July. He said he’s already had discussions with the Senate about re-purposing PPP funds for firms that have been hardest hit by the pandemic, such as restaurants and hotels.
“There appears to be bipartisan support in the Senate to re-purpose the $130 billion for PPP, extending it to business that are most hard-hit,” Mnuchin said.
Having leftover funds is a surprising outcome for the PPP, the centerpiece of the $2.2 trillion relief package Congress enacted in March. The SBA was overwhelmed when the program launched April 3, and an initial $349 billion was depleted in just 13 days. Almost $189 billion in a second round of $320 billion in funding was taped in the first two weeks after the program relaunched April 27.
But demand waned after the initial barrage, in part because of concerns about rules allowing loans to become grants if proceeds were spent on mostly on payroll and an outcry about public firms getting loans at the expense of mom-and-pop shops. Millions of the smallest and vulnerable firms also didn’t know they were eligible or didn’t apply because the complicated program didn’t meet their needs.
(Updates with Rubio comments from fourth graph, Mnuchin comments from eighth.)
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