Bipartisan group of senators asks Treasury, SBA to loosen coronavirus loan restrictions

A bipartisan group of 19 senators has asked the Trump administration to allow recipients of small-business coronavirus relief loans to spend more of the money on nonpayroll expenses without penalty.

In a letter to Treasury Secretary Steven MnuchinSteven Terner MnuchinHouseholds, businesses fall into financial holes as COVID aid dries up Centrist Democrats got their COVID bill, now they want a vote The Hill's Morning Report - Sponsored by Facebook - Republicans lawmakers rebuke Trump on election MORE and Small Business Administration (SBA) Administrator Jovita Carranza released Wednesday, the senators called for increasing the loan forgiveness cap on the SBA’s Paycheck Protection Program (PPP) as some firms struggle to stay afloat.

The PPP allows small businesses facing financial peril because of the pandemic to receive a loan to cover eight weeks of payroll and other essential expenses. The loan can be converted entirely into a grant if at least 75 percent of it is used to cover payroll and keep workers off of unemployment insurance.

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The bipartisan group of senators is asking Treasury and SBA to reduce that threshold for forgiveness to 50 percent, citing the high costs of rent, mortgage and utility payments for many businesses who’ve received aid.

“If they are unable to cover these expenses, they will have to decide between keeping their doors open, at personal financial risk, or closing shop and laying off employees,” wrote the senators.

“These are businesses that will not recover. Such an outcome would result in mass layoffs that would shift more Americans onto unemployment, presenting significant long-term costs to families, businesses, and states," they continued.

The signatories included Republican Sens. John CornynJohn CornynSupreme Court fight pushes Senate toward brink Hillicon Valley: Productivity, fatigue, cybersecurity emerge as top concerns amid pandemic | Facebook critics launch alternative oversight board | Google to temporarily bar election ads after polls close Lawmakers introduce legislation to boost cybersecurity of local governments, small businesses MORE (Texas), John BarrassoJohn Anthony BarrassoTrump's Teflon problem: Nothing sticks, including the 'wins' Senate to push funding bill vote up against shutdown deadline The conservative case for phasing out hydrofluorocarbons MORE (Wyo.), Marsha BlackburnMarsha BlackburnNetflix distances from author's comments about Muslim Uyghurs but defends project Hillicon Valley: Subpoenas for Facebook, Google and Twitter on the cards | Wray rebuffs mail-in voting conspiracies | Reps. raise mass surveillance concerns Key Democrat opposes GOP Section 230 subpoena for Facebook, Twitter, Google MORE (Tenn.), John BoozmanJohn Nichols BoozmanCOVID-19 relief talks look dead until September  Senate GOP hedges on attending Trump's convention amid coronavirus uptick The Hill's Coronavirus Report: San Francisco Gay Men's Chorus Artistic Director Tim Seelig says choirs are dangerous; Pence says, 'We have saved lives' MORE (Ark.), Lindsey GrahamLindsey Olin GrahamGraham neck and neck with challenger in South Carolina Senate race: poll Harris slams Trump's Supreme Court pick as an attempt to 'destroy the Affordable Care Act' Sunday shows preview: Lawmakers prepare for SCOTUS confirmation hearings before election MORE (S.C.), Cory GardnerCory Scott GardnerBreaking the Chinese space addiction Trump dumbfounds GOP with latest unforced error Billionaire who donated to Trump in 2016 donates to Biden MORE (Colo.), Roger WickerRoger Frederick WickerThe Hill's Morning Report - Sponsored by Facebook - Republicans lawmakers rebuke Trump on election Hillicon Valley: Subpoenas for Facebook, Google and Twitter on the cards | Wray rebuffs mail-in voting conspiracies | Reps. raise mass surveillance concerns Key Democrat opposes GOP Section 230 subpoena for Facebook, Twitter, Google MORE (Miss.) and Kelly LoefflerKelly LoefflerDemocrats ramp up pressure on Lieberman to drop out of Georgia Senate race The Hill's Campaign Report: Biden on Trump: 'He'll leave' l GOP laywers brush off Trump's election remarks l Obama's endorsements GOP, Democrats look to galvanize women with SCOTUS fight MORE (Ga.) and Democratic Sens. Bob MenendezRobert (Bob) MenendezWatchdog confirms State Dept. canceled award for journalist who criticized Trump Kasie Hunt to host lead-in show for MSNBC's 'Morning Joe' Senators ask for removal of tariffs on EU food, wine, spirits: report MORE (N.J.), Chris Van HollenChristopher (Chris) Van HollenCongress must finish work on popular conservation bill before time runs out Democrats fear Russia interference could spoil bid to retake Senate Mid-Atlantic states sue EPA over Chesapeake Bay pollution MORE (Md.), Dick DurbinRichard (Dick) Joseph DurbinGOP senators confident Trump pick to be confirmed by November Sunday Shows: Trump's court pick dominates Durbin: Democrats can 'slow' Supreme Court confirmation 'perhaps a matter of hours, maybe days at most' MORE (Ill.), Michael BennetMichael Farrand BennetOVERNIGHT ENERGY: House Democrats tee up vote on climate-focused energy bill next week | EPA reappoints controversial leader to air quality advisory committee | Coronavirus creates delay in Pentagon research for alternative to 'forever chemicals' Senate Democrats demand White House fire controversial head of public lands agency Next crisis, keep people working and give them raises MORE (Colo.), Ron WydenRonald (Ron) Lee WydenHillicon Valley: Subpoenas for Facebook, Google and Twitter on the cards | Wray rebuffs mail-in voting conspiracies | Reps. raise mass surveillance concerns On The Money: Anxious Democrats push for vote on COVID-19 aid | Pelosi, Mnuchin ready to restart talks | Weekly jobless claims increase | Senate treads close to shutdown deadline Democratic senators ask inspector general to investigate IRS use of location tracking service MORE (Ore.), Kirsten GillibrandKirsten GillibrandSunday shows preview: Lawmakers prepare for SCOTUS confirmation hearings before election Sunday shows preview: Justice Ginsburg dies, sparking partisan battle over vacancy before election Suburban moms are going to decide the 2020 election MORE (N.Y.), Kyrsten Sinema (Ariz.), Cory BookerCory Anthony BookerBooker says he will ask Amy Coney Barrett if she will recuse herself from presidential election-related cases Sunday shows preview: Lawmakers prepare for SCOTUS confirmation hearings before election The movement to reform animal agriculture has reached a tipping point MORE (N.J.), Christopher CoonsChristopher (Chris) Andrew CoonsCoons: 'Defies comprehension' why Trump continues push to 'strip away' protections for pre-existing conditions Two Judiciary Democrats say they will not meet with Trump's Supreme Court pick Sunday shows preview: Lawmakers prepare for SCOTUS confirmation hearings before election MORE (Del.), Patrick LeahyPatrick Joseph LeahyBipartisan representatives demand answers on expired surveillance programs Democrats shoot down talk of expanding Supreme Court Battle over timing complicates Democratic shutdown strategy MORE (Vt.) and Richard Blumenthal (Conn.).

The SBA is amid the second round of funding for PPP loans after approving $349 billion during a first round that lasted less than two weeks. The SBA is expected to deplete the second pot of $310 billion in funding by the end of this week after opening applications last Monday.

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While there is wide bipartisan support for PPP, lawmakers and small businesses advocates have grown increasingly concerned about the impact of the program’s quickly written requirements.

Small businesses advocates have urged the administration to give PPP recipients greater flexibility to use those loans to cover nonpayroll expenses or hold onto some of the money beyond the eight-week period targeted in the program.

Even so, Mnuchin said Monday that he doesn't "have the flexibility" to alter the terms of the program and said businesses who need help covering overhead costs should apply for an SBA Emergency Injury Disaster Loan (EIDL), which includes a smaller grant attached to a loan.

"Really, the purpose of this was to get workers back to work. And every dollar we spend here is a dollar we save on unemployment insurance," Mnuchin said in an interview on Fox Business Network. 

"The idea is that taxpayers would forgive the majority of the money that was going to the workers, which saves unemployment, and a reasonable amount of overhead. I think 25 percent overhead is very fair," he continued.