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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.

Bowing to political pressure, the Trump administration said on Friday that it would disclose borrower information for recipients of millions of small-business loans through the $660 billion Paycheck Protection Program, the New York Times reported. The decision is a reversal for the administration, which had closely guarded the information and argued that private businesses should not have their names or the amount of money that they took from the federal government disclosed. The move comes as Democrats had seized on the secrecy surrounding the program to suggest that the bailout was an example of the Trump administration engaging in corporate cronyism. The new disclosures will apply to loans of more than $150,000. The information will be broken down into five loan ranges, topping out at the maximum amount of $10 million. The Small Business Administration will release business names, addresses, demographic data and jobs supported. The Treasury Department, which jointly administers the loan program with the SBA, did not say when the new information would be made public; however, some of the demographic data will be included in loan forgiveness applications, which might not be submitted for months. Treasury officials said on Friday that the decision, which has bipartisan support, would provide transparency while maintaining protection for small businesses. It does not appear that any additional legislation will be required, and the Treasury maintains that the law did not mandate the disclosure of additional data.

Matt Valeo called 10 banks this week, because he wanted to apply for a Main Street loan for his small tech company. Eight banks said they had never heard of the Main Street Lending Program. Two smaller banks said they knew about the program but did not plan to participate. Valeo’s experience illustrates some of the concerns about the novel $600 billion loan program the Federal Reserve launched on Monday to help small and midsize firms, the Washington Post reported. The much-delayed program appears to be off to a tepid start, with lingering questions over whether there will be enough banks participating to make the loans. The Fed’s Main Street Lending Program is supposed to provide low-cost loans to firms with fewer than 15,000 workers, but it has taken the Fed nearly three months to launch it and many have criticized it for being too little, too late. Both the Paycheck Protection Program and Main Street Lending program are multibillion-dollar lending programs aimed at helping smaller and midsize companies, but Main Street is a loan that can be used for any expense. PPP is a grant that doesn’t need to be repaid, as long as most of the money goes toward paying employee salaries. The Fed runs the Main Street program, while the Small Business Administration handles PPP. The programs play critical roles in the government’s vast effort to keep companies afloat and persuade them to retain or even hire back workers amid the worst recession since the Great Depression, which has sidelined at least 20 million workers. PPP had a chaotic launch April 3 as banks struggled to get it running and handle the deluge of customers seeking funds, but it ultimately handed out $500 billion. The Fed’s Main Street program has only just begun. To get a Main Street loan, businesses have to apply through a bank, which can then sell 95 percent of the loan to the Fed, transferring most of the risk to the central bank. The Fed first announced its intent to create the program on March 23. Since this is the first time the Fed has done anything like this, current and former central bank officials say it took time to get the details right. On Monday, the Fed announced that banks could start registering to participate in the program. On Tuesday, Fed Chair Jerome H. Powell told a Senate panel there was “substantial interest” from banks in taking part in Main Street loans. But the banking community is less enthusiastic. “We have limited interest from community banks nationwide,” said Paul Merski, executive vice president for the Independent Community Bankers of America. “It’s a very challenging and complex program.”

Small-business owners won’t have to pay back their federal pandemic relief loans even if they don’t rehire all of the workers they laid off, the Trump administration affirmed, effectively eliminating a rule that many borrowers had feared would leave them stuck with a large debt, the New York Times reported. Congress appeared to relax that requirement this month with a new law that loosened many terms of the Paycheck Protection Program, a $660 billion relief effort intended to help struggling small companies retain or rehire their workers. But the final say on how the law would be interpreted rested with the Treasury Department, which has called the shots on most aspects of the relief effort. The Treasury Department and the Small Business Administration, the program’s manager, released new loan forgiveness forms that slashed documentation requirements and will give many borrowers an easy pathway to having their debt eliminated. The forms added a “safe harbor” option that allows borrowers to simply affirm they were unable to operate “at the same level of business activity” they had before the crisis because of government requirements or safety guidance, including social distancing rules. Those borrowers can have their loans fully forgiven if they meet the program’s other rules, including a requirement that they spend at least 60 percent of their aid money on payroll.

Many small-business owners across the country are testing their workers to catch potential coronavirus outbreaks before they start, eager to keep their companies afloat as the U.S. economy and regions of the country reopen in varying stages, the Wall Street Journal reported. Small businesses, which typically have fewer financial reserves than large firms, are grappling with the logistics, costs and privacy implications of testing workers. “There’s been a rubber band of stress around my head since March,” said Sara Polon, the owner of Washington, D.C.-based Soupergirl, who began testing workers three weeks ago. A doctor reports to her storefront and commercial kitchen each week, swabbing the back of employees’ noses or throats one-by-one. Polon isn’t sure how long insurance companies will continue to help offset the cost of testing but says she feels she is making life-or-death safety decisions that ripple through the families of her workers. While the federal government made funds available to small businesses through Paycheck Protection Program loans, most of those funds had to be used for specific purposes like payroll so they would be forgiven. That has meant testing and other safety precautions are an added financial burden at an already difficult time. The Centers for Disease Control and Prevention doesn’t dictate whether and how frequently employers should test workers for the virus, but it has published considerations for critical businesses like food processors that implement testing strategies. The CDC says such testing should only be implemented if it leads to actions like quarantining sick people and taking a risk-based approach to testing those who may have been exposed.
The agency advises businesses of all sizes to conduct daily health checks, implement social distancing practices and encourage employees to wear face masks.

Pressure is building on the Trump administration to disclose the names of borrowers that received loans through the Paycheck Protection Program, and a key senator signaled that the names of larger loan recipients could be released, the Wall Street Journal reported. The Small Business Administration has so far not made public the list of roughly 4.6 million businesses that have received more than $512 billion from the pandemic emergency lending program since early April. The agency is holding out despite growing demands for the data from government auditors, media companies, public interest groups and Republicans and Democrats in Congress. All contend disclosure is essential to determine whether the huge program is working as intended. “We will have PPP loan disclosure,” Sen. Marco Rubio (R., Fla.), chairman of the Senate Small Business Committee, wrote Tuesday on Twitter. Rubio, who has worked closely with the Trump administration on the PPP, said that there is “no dispute over larger loan recipients being disclosed” but that discussions were still under way on “how to treat smaller loans to mostly micro-business, sole proprietors & independent contractors.” Rubio’s expectation of disclosure contrasted with comments last week by Treasury Secretary Steven Mnuchin, who said during a hearing before Rubio’s committee that the administration isn’t publicly disclosing the identities of PPP loan recipients. Read more. (Subscription required.) 

In related news, the House Small Business Committee will hold a hearing tomorrow at 1 p.m. ET titled "Paycheck Protection Program: Loan Forgiveness and Other Challenges." To view the witness list, access a link to the live hearing webcast and additional hearing information, please click here.