The application window for a small business aid program is closing at the end of the day 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 initially set to run through the end of June. After briefly shutting its doors, Congress passed legislation reopening and extending the application period through Aug. 8.
The program is viewed as one of the most successful parts of the $2.2 trillion March bill, which also included direct payments to individuals and hundreds of billions in relief for impacted sectors such as airlines.
Under the PPP, a business can have its loan forgiven as long as the money is used to keep employees on the payroll. Congress has appropriated approximately $650 billion for the program.
Lawmakers made a few tweaks since March, including changing an initial requirement that 75 percent of the loan had to be used on payroll and 25 percent could be used on expenses such as rent to a 60-40 ratio. They also lengthened the window that businesses had to spend the money and still qualify for loan forgiveness.
As of Aug. 6, the Small Business Administration had approved nearly 5.16 million loans for a total of $523.4 billion spent of the money greenlighted by lawmakers.
But the PPP's rollout suffered glitches, including an overwhelmed SBA website and confusion over the rules for applying.
The Associated Press reported that hundreds of millions went to businesses owned by major donors to President TrumpDonald TrumpWendy Sherman takes leading role as Biden's 'hard-nosed' Russia negotiator Senate needs to confirm Deborah Lipstadt as antisemitism envoy — Now Former acting Defense secretary under Trump met with Jan. 6 committee: report MORE, and several businesses with ties to lawmakers received assistance. Large chains also disclosed that they were able to use loopholes to get PPP funding.
Lawmakers and the administration are interested in doing a second tranche of the PPP. But the program is tied up in larger talks on a fifth coronavirus package that collapsed on Friday with negotiators failing to strike a compromise.
Mnuchin, on Friday, pointed to the PPP as an area where there was “broad bipartisan agreement.”
Lawmakers want the roughly $127 billion left 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 the funding to businesses with no more than 300 employees, compared with the 500-worker cap placed in March. It would also include a revenue test, limiting loans to businesses that have lost at least 50 percent of revenue compared with a previous year’s quarter.
Sen. Ben CardinBenjamin (Ben) Louis CardinBiden to huddle with Senate Democrats as voting bill on brink of defeat US budget deficit narrows sharply Senate Democrats grow less confident in Manchin MORE (Md.), the top Democrat on the Senate Small Business Committee, said talks with Republicans on final language for the program were in “pretty good shape” but that they didn’t have an agreement. Cardin noted that Democrats specifically want more funds for Economic Injury Disaster Loans.
As the deadline for the application window loomed, Senate Republicans were going to force a vote on a stand-alone PPP plan this week in an effort to make Democrats go on the record. But that was scuttled by GOP infighting.
"Sen. [Ron] Johnson [R-Wis.] wanted to file an amendment to claw back money from PPP recipients retroactively even if they showed a profit, which, in my view would completely destroy the program," said Sen. Marco RubioMarco Antonio RubioHow a nice-guy South Dakota senator fell into a Trump storm Republicans threaten floor takeover if Democrats weaken filibuster Democrats must close the perception gap MORE (R-Fla.). "With that sort of requirement, there's no point in even having a second round."
"There was scheduled to be one, but when a couple members insist on that ... something that would destroy the program, it's not even worth having that vote," Rubio added.