House clears bill to extend loan program for small business
Extends application deadline for PPP loans to August 8
A day after the Senate passed a last-minute extension of the Paycheck Protection Program loan application deadline, the House did the same Wednesday, clearing the bill for the president.
Somewhat unexpectedly, the Senate by unanimous consent passed a bill on Tuesday from Sen. Benjamin L. Cardin, D-Md., that would extend the Small Business Administration’s forgivable loan program for coronavirus-impacted companies from June 30 to Aug. 8.
Senate Democrats had expected Republicans to object to the request for unanimous consent Tuesday night, but an agreement was reached at the last minute. Senate Minority Leader Charles E. Schumer of New York gave an unusually partisan floor speech for a bipartisan achievement.
“Let me salute Sen. Cardin and Sen. Shaheen for bringing this measure to the floor and forcing our colleagues on the other side of the aisle to relent, who originally, of course, wanted to block this bill all day long,” he said. Democratic Sen. Jeanne Shaheen of New Hampshire was among those speaking for the bill on the Senate floor.
The Senate passage appeared to catch House Democrats by surprise. The chamber could have scheduled a companion bill for a vote this week but didn’t. Instead, the House relied on a risky unanimous consent procedure, which could have been blocked by any one of the 435 members.
Speaking earlier in the day, Rep. Nydia M. Velázquez, D-N.Y., the chairwoman of the House Small Business Committee, told reporters she was waiting for the administration to respond to her data requests before she wanted movement on legislation.
“We need to make an assessment whether or not the program has been successful and if it has done what Congress intended it to,” she said. “Without data, we cannot make an assessment; that is my mind. Some people want to make all the changes. We need the data.”
Velázquez pressed Treasury Secretary Steven Mnuchin for the data at a hearing Tuesday. Mnuchin said she’d have it by Friday.
Kevin Kuhlman, the vice president of federal government relations at the National Federation of Independent Business, wondered if the Democrats' unanimous consent request in the Senate was a political feint that the GOP saw through. Democrats issued an advisory in the afternoon giving journalists timing details for an "attempt" to pass the bill.
“It was almost like a trap that didn’t work, like a head fake that no one went for,” said Kuhlman.
FiscalNote, parent company of CQ Roll Call, has received a loan under the Paycheck Protection Program.
Lifeline for small business
The PPP program was extremely popular early in the pandemic as a lifeline to keep small businesses afloat during the mass shutdown orders initiated to slow the spread of COVID-19. The program provides small businesses forgivable loans of up to 10 weeks worth of payroll to use mostly on paying workers and some other fixed costs. To the extent the businesses follow the program’s guidelines, the debts are forgiven. Money used for other purposes turns into low interest loans with five-year terms.
Lobbying efforts have been focused on allowing still-struggling borrowers to apply for additional PPP loans — which has been the focus of negotiations among the Senate Small Business and Entrepreneurship Committee and Mnuchin — rather than extending the application deadline for the current round. But supporters aren't complaining.
“This, clearly, is not a bad thing,” said Kuhlman, saying the extension could help small business owners who only recently had their eligibility clarified by the SBA, like ex-convicts, farmers and fishermen.
The number of borrowers rose in recent weeks, following enactment of a bill in early June that offered more flexibility in using the funds. The day before the law was signed, 4.5 million loans had been made totaling $511.5 billion. Since then, an additional 350,000 loans worth $9 billion have been made.
Kuhlman said only 3 percent of small businesses recently surveyed by the NFIB who were interested in applying to the program had not yet done so.
Keith Miller, past chairman of the Coalition of Franchisee Associations, called the extension “helpful to those who haven’t applied,” but said it didn’t mean much for the thousands of small businesses who’ve seen their PPP lifelines dry up.
“Unfortunately, the PPP was designed as a bridge for businesses for two months and thousands of small businesses are past that and in desperate need of a PPP2 to keep surviving as the pandemic is not letting up,” he said.
Senate Small Business and Entrepreneurship Chairman Marco Rubio, R-Fla., and Mnuchin have been negotiating a second round for the PPP that would focus on the hardest-hit businesses that had shown a large drop in revenue due to the pandemic. Talks have revolved around the idea of allowing those businesses to apply for a second round of funding, with the portions not used for payroll converted into long-term, low-interest loans.
Rubio told reporters Wednesday there was broad consensus on repurposing the $132 billion left in the PPP purse for a second round of funds aimed at the businesses still facing large revenue drops. The sticking point now, he said, was how much additional funding Congress might provide.
Speaking on the Senate floor Wednesday, one of the program’s initial authors, Sen. Susan Collins, R-Maine, laid out her proposals for the second round. Collins said the next PPP bill should allow companies that have seen their revenue drop by 50 percent get another loan, but only those with 300 or fewer employees, rather than the 500 employee limit in the first round. Collins also wants to expand forgivable PPP expenses to include costs for protective equipment or facility upgrades to safely operate through the pandemic.
Republicans have said they will negotiate the next round of COVID-19-related aid when the Senate returns from recess in mid-July.
Jennifer Shutt contributed to this report.