Small business owners now have until August 8 to apply for a loan through the Paycheck Protection Program (PPP). This is thanks to a bill signed by President Trump on Saturday.
The deadline to apply was June 30. However, more than $134 billion in funding still available according to the Small Business Administration. With this, President Trump extended the deadline so more businesses could benefit from the program.
The bill signed by President Trump also separated the authorized limits for loan commitments from other lending programs offered by the Small Business Administration.
According to the SBA, the PPP had awarded more than 4.7 million forgivable loans for more than $518 billion as of June 27.
Officials in the Trump administration said on Thursday that they will begin releasing information on the companies that have received more than $150,000 from the program. This is in an effort to address complaints about large, well-funded companies. These large companies receive PPP loans while many small or independently-owned businesses struggled to receive funding.
According to the US Treasury, approximately 5,300 borrowers have received almost 2.5 million loans worth $228 billion. That is roughly 44 percent of total PPP spending.
The SBA made an effort to address another complaint by small businesses. It has lowered the percentage of the loan balance that must be used to keep employees on the payroll. Previously, if more than 25% of the loan balance was used for purposes other than keeping employees on the payroll, the loan would have to be repaid. That threshold has been reduced to 60% of the loan balance used on employee salaries to make the loan forgivable.
The Program’s Significance
President Trump credits the Paycheck Protection Program with keeping an estimated 50 million Americans employed when they would otherwise have lost their jobs, preventing the unemployment rate from worsening as the country faced an economic shutdown.
The extension of the Paycheck Protection Program had unanimous bipartisan support. However, the July 31 deadline to extend the enhanced unemployment benefits will be hotly contested.
The latest high-ranking cabinet member to come out against extending the benefits is Labor Secretary Eugene Scalia.
During an interview on Fox News Sunday, Scalia said PPP loans serve as an “essential” part of the recovery. However, he doesn’t believe that $600-a-week enhanced unemployment benefits are needed beyond their July 31.
“It was a really important thing to do as we were shutting our economy down. Americans across the country were basically being told, and we needed to take measures, but they were basically being told, you can’t go to work right now and so we needed that substantial unemployment benefit. There are some states where you can get on an annual basis $75,000 a year right now on unemployment. As we reopen the economy, I don’t think we need a benefit like that.” he said.
Scalia added, “During the so-called Great Recession 10, 12 years ago when we had a downturn, The added federal unemployment benefit was $25 a week. What we did in the CARES Act was $600 a week.”