The Senate passed a bill to extend the filing deadline for Paycheck Protection Program loans Tuesday evening, hours before the Small Business Administration is set to stop accepting applications.
Sen. Benjamin L. Cardin, ranking member of the Small Business and Entrepreneurship Committee, asked for unanimous consent on a bill that would extend the program’s deadline from June 30 to Aug. 8. He was met with no objections, sending the legislation over to the House.
But unless and until the House OKs the language, the SBA will stop accepting applications to the program, which was extremely popular early on in the COVID-19 pandemic to keep small businesses afloat during the mass shutdowns initiated to slow the spread of the disease.
Prior to passage, Sen. Rick Scott, R-Fla., asked unanimous consent that Cardin modify his request and allow the bill to be amended to prohibit businesses that had not seen a pandemic downturn from eligibility for PPP funding. Cardin objected to the proposed change.
The PPP provides small businesses forgivable loans of up to 10 weeks’ worth of payroll to use mostly on paying workers and some other fixed costs. If the businesses follow the program’s guidelines, their debts are forgiven. Money used for other purposes turns into low interest loans with five-year terms.
But in recent weeks, applications to the program have declined, and the amount of loan money available increased as some borrowers returned their loans or paid them back early. Enactment of a bill to loosen the program’s requirements and extend the period in which the forgivable loans could be spent did little to increase demand for the SBA money. It’s unclear whether many small businesses would take advantage of a later deadline.
FiscalNote, parent company of CQ Roll Call, has received a loan under the Paycheck Protection Program.
Small Business Chairman Marco Rubio, an architect of the program, has said he wants to repurpose the unclaimed funds to help the hardest hit small businesses. That idea, which Treasury Secretary Steven Mnuchin has endorsed, would allow businesses demonstrating particularly large dropoffs in revenue to apply for additional forgivable loans wherein the portions not used for payroll would be converted into long-term, low-interest loans.