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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 MnuchinOn The Money: Businesses, wealthy brace for Biden tax hikes | Dow falls more than 650 points as COVID-19 cases rise, stimulus hopes fade | Kudlow doesn't expect Trump to release detailed economic plan before election Overnight Health Care: US sets a new record for average daily coronavirus cases | Meadows on pandemic response: 'We're not going to control it' | Pelosi blasts Trump for not agreeing to testing strategy Gaffes put spotlight on Meadows at tough time for Trump 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 CornynTrump leads Biden in Texas by 4 points: poll President Trump: To know him is to 'No' him Dallas Morning News poll shows Biden leading Trump in Texas MORE (Texas), John BarrassoJohn Anthony BarrassoSenate GOP to drop documentary series days before election hitting China, Democrats over coronavirus Hillicon Valley: Senate panel votes to subpoena Big Tech executives | Amazon says over 19,000 workers tested positive for COVID-19 | Democrats demand DHS release report warning of election interference GOP senators call on Trump to oppose nationalizing 5G MORE (Wyo.), Marsha BlackburnMarsha BlackburnSenate GOP to drop documentary series days before election hitting China, Democrats over coronavirus Senate Judiciary to vote on subpoena for Twitter CEO next week Government efforts to 'fix' social media bias overlooks the destruction of our discourse MORE (Tenn.), John BoozmanJohn Nichols BoozmanRomney calls first Trump-Biden debate 'an embarrassment' COVID-19 relief talks look dead until September  Senate GOP hedges on attending Trump's convention amid coronavirus uptick MORE (Ark.), Lindsey GrahamLindsey Olin GrahamGOP Senate confirms Trump Supreme Court pick to succeed Ginsburg Murkowski predicts Barrett won't overturn Roe v. Wade Biden seeks to close any path for Trump win in race's final days MORE (S.C.), Cory GardnerCory Scott GardnerDemocrats brace for nail-biting finish to Senate battle Trump expressed doubt to donors GOP can hold Senate: report The Hill's Campaign Report: 2020 spending wars | Biden looks to clean up oil comments | Debate ratings are in MORE (Colo.), Roger WickerRoger Frederick WickerBipartisan group of senators call on Trump to sanction Russia over Navalny poisoning Senate Republicans offer constitutional amendment to block Supreme Court packing Government efforts to 'fix' social media bias overlooks the destruction of our discourse MORE (Miss.) and Kelly LoefflerKelly LoefflerPoll shows deadlocked races for president, Senate seat in Georgia Schumer warns of COVID-19 danger posed by Pence on Senate floor Two Loeffler staffers test positive for COVID-19 MORE (Ga.) and Democratic Sens. Bob MenendezRobert (Bob) MenendezSenate Democrats hold talkathon to protest Barrett's Supreme Court nomination Watchdog confirms State Dept. canceled award for journalist who criticized Trump Kasie Hunt to host lead-in show for MSNBC's 'Morning Joe' MORE (N.J.), Chris Van HollenChristopher (Chris) Van HollenDemocratic senators unveil bill to ban discrimination in financial services industry Senate Democrats call for ramped up Capitol coronavirus testing Democratic senators offer bill to make payroll tax deferral optional for federal workers MORE (Md.), Dick DurbinRichard (Dick) Joseph DurbinDemocrats warn GOP will regret Barrett confirmation Democrats brace for nail-biting finish to Senate battle Democratic Senate emerges as possible hurdle for progressives  MORE (Ill.), Michael BennetMichael Farrand BennetSenate Democrats hold talkathon to protest Barrett's Supreme Court nomination Cotton mocks NY Times over claim of nonpartisanship, promises to submit op-eds as test Democrats sense momentum for expanding child tax credit MORE (Colo.), Ron WydenRonald (Ron) Lee WydenPlaintiff and defendant from Obergefell v. Hodges unite to oppose Barrett's confirmation Senate Democrats call for ramped up Capitol coronavirus testing House Democrats slam FCC chairman over 'blatant attempt to help' Trump MORE (Ore.), Kirsten GillibrandKirsten GillibrandInternal Democratic poll: Desiree Tims gains on Mike Turner in Ohio House race Hillicon Valley: Facebook, Twitter's handling of New York Post article raises election night concerns | FCC to move forward with considering order targeting tech's liability shield | YouTube expands polices to tackle QAnon Democrats question Amazon over reported interference of workers' rights to organize MORE (N.Y.), Kyrsten Sinema (Ariz.), Cory BookerCory Anthony BookerDemocratic senators unveil bill to ban discrimination in financial services industry Obama endorses Espy in Mississippi Senate race Durbin says he will run for No. 2 spot if Dems win Senate majority MORE (N.J.), Christopher CoonsChristopher (Chris) Andrew CoonsDemocrats warn GOP will regret Barrett confirmation Democrats brace for nail-biting finish to Senate battle Democratic Senate emerges as possible hurdle for progressives  MORE (Del.), Patrick LeahyPatrick Joseph LeahySchumer says he had 'serious talk' with Feinstein, declines to comment on Judiciary role Durbin says he will run for No. 2 spot if Dems win Senate majority Democrats seem unlikely to move against Feinstein 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.