Small businesses and startups still interested in getting a Paycheck Protection Program loan now have more time to do so. And $130 billion in loans remains available.
The US Senate on Tuesday passed an extension of the program to Aug. 8. Applications were due to close on June 30.
“Under the bill passed by the Senate by unanimous consent, the deadline for applying for PPP loans — which go to businesses with fewer than 500 employees — would be extended until Aug. 8,” The Hill reported.
The extension could mean new life for businesses looking for lifelines to stay open.
Jessica and Richard Fierro are among more than 4.5 million small business owners who have so far tapped into the $660 billion Paycheck Protection Program — the massive federal effort to keep the backbone of the US economy afloat amid the coronavirus-driven recession.
But like so many others, the owners of Atrevida Beer Co. in Colorado Springs, Colorado, have an urgent message for lawmakers as applications for the small business emergency rescue program close Tuesday night: Access to money with more flexible terms is needed, and fast.
“It didn’t solve the problems,” Rich Fierro told CNN in an interview. “What it did was sustain us for a few more months.”
The program, as it was drafted in the earliest days of the pandemic and resulting shutdowns of businesses across the country, was intended to do just that — serve as a bridge for small business owners who watched their revenues vanish into thin air through no fault of their own.
The program was designed to bridge the shutdowns and help businesses keep employees in their jobs — and in turn, the loans taken out would be forgiven, essentially shifting into a grant. But now business owners like the Fierros are watching the virus spike across the country with trepidation — and growing recognition that a short-term fix isn’t the right recipe for survival for small operators ravaged by the pandemic.
“It’s such a fluid situation that no one really knows when it’s gonna start to kind of die down,” Jessica Fierro told CNN. “And then when we do start to see it die down and it starts to peak right back up.”
What to do with $130 billion
Lawmakers on both sides of the aisle are keenly aware that more needs to be done — and they have starting capital to do just that.
“My concern is that the money that’s unspent now is the money we are arguing should be held over and used for a new round of assistance to small business,” said Florida Republican Sen. Marco Rubio. “So as long as that deadline is open, you can’t do that.”
Rubio, the chair of the Senate’s Small Business Committee, led the drafting of the program and has worked to address implementation issues throughout its nearly three months of existence.
The reality of ongoing crisis has shifted the dynamics away from the original intent of the program, he said.
“My sense is the greater need right now is in companies that have received that assistance but now need new or different kinds of assistance,” Rubio said.
The small business program served to deploy more than $513 billion in loans to businesses, but as the shutdowns wore on, the structure of how that money must be used for the loans to be forgivable changed. A requirement that 75% had to go toward employee salaries was dropped to 60%, and the timeline in which it needed to be used — eight weeks — was expanded to 24 weeks.
Treasury Secretary Steven Mnuchin made clear Tuesday that he supports repurposing the unused funds.
“I think that should be done,” Mnuchin said during a House Financial Services Committee hearing.