Back in April, when the U.S. Small Business Administration was approving about $25 billion in coronavirus loans a day, lawmakers and companies were concerned that $669 billion in relief would run dry, leaving countless mom-and-pop firms hanging. Yet the Paycheck Protection Program had more than $100 billion in funding left as of last Saturday, with only days remaining until the SBA stops taking new applications on June 30, Bloomberg News reported. The PPP loans were a lifeline for the more than 4.7 million companies that got assistance — with an unprecedented $516.5 billion approved over two rounds in less than three months. Still, demand waned after an initial barrage. Millions of the smallest and most vulnerable firms didn’t know they were eligible or didn’t apply because the complicated program didn’t meet their needs. Now, there’s debate in Congress about what to do with the leftover PPP money, and how to reach those businesses as the economy reopens in the midst of new virus outbreaks across the country. “There’s strong bipartisan interest in protecting the funds that have been appropriated to develop a second round, but to have it targeted more to those small businesses that really need the help,” said Sen. Ben Cardin (D-Md.), the top Democrat on the Small Business & Entrepreneurship Committee. Sen. Marco Rubio (R-Fla.), the panel’s chairman, has also suggested another phase of targeted relief. Having leftover funds is a surprising outcome for the PPP program, the centerpiece of the $2.2 trillion relief package Congress enacted in March in response to the pandemic. The criteria to turn the debt into a grant, chiefly by spending a large chunk of the money on payroll, suited larger firms better than mom-and-pop stores and the self-employed. The PPP loans, disbursed via approved lenders, also were harder to get for businesses in low-income communities that often are shut out of the traditional banking system. The initial $349 billion in PPP funding for forgivable loans was depleted in just 13 days, and almost $189 billion of a second round of $320 billion was tapped in the first two weeks after the program relaunched April 27. The program, designed for the 30 million U.S. businesses that have fewer than 500 employees, has stalled since mid-May, leaving about $128 billion available as of June 20, according to the SBA. Read more.
In related news, Treasury Secretary Steven Mnuchin said that the Trump administration is discussing another stimulus package with lawmakers that could be passed in July, the latest effort to revive the U.S. economy amid the coronavirus pandemic, Bloomberg News reported. “It’s something we’re very seriously considering,” Mnuchin said on Tuesday. He said that he expects the U.S. economy to exit recession by year’s end. President Donald Trump has said he’s considering sending another round of economic stimulus payments in a rescue package that he expects will be released “over the next couple of weeks.” The Trump administration has privately discussed a $1 trillion measure as a way to stimulate jobs growth after the COVID-19 pandemic. Mnuchin reiterated that he and the president are not inclined to shut down the economy a second time if there is a resurgence in coronavirus cases. He noted that in March when businesses were ordered to close, hospitals had been overwhelmed with patients and ventilators were running low. Earlier this week, Mnuchin met with Republican senators, who are considering whether the next stimulus measure should include another round of direct payments to individual households. “We want to take our time and make sure we are thoughtful,” Mnuchin said after meeting with the lawmakers. “Whatever we do will be much more targeted and much more focused on jobs and bringing back jobs.” Read more.
