The federally-backed forgivable loan program known as the Paycheck Protection Program (PPP) is reportedly exhausted of funds already, just days after Congress approved an additional $320 billion for the program.
Created by the CARES Act, the PPP is designed to help small businesses maintain payroll and other operational expenses during the ongoing COVID-19 pandemic. The first wave of funding for the program was $349 billion and supported more than 1.6 million loans but the money ran out in 14 days. Congress replenished the PPP in an interim bill last week which helped address a backlog of loan applications, but millions of small businesses and other entities have been unable to access the program.
With the unemployment rate still skyrocketing, it’s likely that Congress will need to replenish the PPP yet again in the upcoming CARES 2 package that lawmakers are drafting. Lawmakers and administration officials are also trying to address an outcry that, in the rush to disperse hundreds of billions of emergency spending, large companies have received loans through the PPP. Treasury Secretary Steven Mnuchin said this week that oversight of the program by the Small Business Administration (SBA) would be tightened to ensure the loans are being directed as intended to businesses with fewer than 500 employees.
“For any loan over $2 million the SBA will be doing a full review of that loan before there is loan forgiveness, so we will make sure that what is the intent for taxpayers is fulfilled here,” Mnuchin said. Mnuchin added that overall, the program is an “overwhelming success” and that a million loans have gone to companies with fewer than 10 employees.
House Speaker Nancy Pelosi (D-CA) earlier this week brought up the possible expansion of the types of businesses that can apply for PPP loans to include 501(c)(6) associations – as ASAE and other groups have advocated – and businesses with 1,000 employees instead of the current 500.
Thanks to outreach from ASAE and other associations, bipartisan support for (c)(6) inclusion in the PPP has grown. A bipartisan sign-on letter led by Sens. Bill Cassidy (R-LA) and Joe Manchin (D-WV) was sent to Senate Majority Leader Mitch McConnell (R-KY) and Minority Leader Chuck Schumer (D-NY) this week with 18 co-signers urging leadership to support PPP eligibility for associations. A similar bipartisan sign-on letter led by Reps. Chris Pappas (D-NH) and Brian Fitzpatrick (R-PA) and signed by 60 other House members urges House leadership to make local chambers of commerce and other 501(c)(6) associations eligible for assistance through the PPP.