Dear Clients, Business Associates and Friends:
The US House passed an extension of the $660 billion Paycheck Protection Program fewer than 24 hours after the program shut its doors, moving one step closer to reopening the cornerstone small business coronavirus relief effort.
The House unanimously passed the extension, which would keep the program open to applications to August 8, 2020. The measure will now go to President Donald Trump’s desk for his signature.
The House passage completes a whirlwind several days for a program that was all but certain to shutter until bipartisan negotiations were sparked in the US Senate on Tuesday afternoon.
Throughout the day Wednesday, House Democrats also debated how to handle the extension, with some pushing for additional changes to the program, according to several aides involved in the discussions.
Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza told lawmakers last week that data would be delivered to House committees by the end of this week, but there has been palpable frustration among Democrats over how long it has taken up to this point.
As it stands, more than 4.8 million small businesses tapped more than $520 billion in potentially forgivable loans through the program, a central pillar of the $2.2 trillion emergency economic relief efforts deployed in March to try and keep the economy afloat as the pandemic led to mass shut downs of businesses around the country.
The program was so critical at its inception that a first round of funding dried up in fewer than two weeks and had to be replenished. But interest in the program largely dried up in recent weeks, as shifting rules and the inability of borrowers to come back for a second loan limited the number of small businesses able to go through the application process.
More than $130 billion in allocated funds remained unused at the time of the program’s closure Tuesday night.
That, along with the looming deadline, have spurred bipartisan negotiations about the next phase of the program and small business relief.
Bipartisan Senate negotiations have started to move quickly, as lawmakers seek to lay the groundwork for the small business portion of the next stimulus legislation. Negotiations on that package are expected to kick into gear later this month after lawmakers return from the July 4 holiday recess.
Lawmakers involved in he negotiations are seeking a more targeted use of the left over funds in the next round of stimulus legislation, focusing specifically on the hardest hit businesses and industries.
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