Lawmakers are considering stricter perimeters for small businesses to qualify for the second round of PPP funding. Lawmakers will iron out the specifics of these restrictions upon returning from recess on July 20.
Congress extended the deadline for small businesses to apply for the potentially forgivable loans from June 30 to Aug. 8. Approximately $130 billion in allocated funding has not been used.
The $670 billion PPP fund was created by Congress in March to provide pandemic relief to small businesses with 500 or fewer employees. These loans are forgivable if the businesses use funds for payroll costs and expenses such as interest on mortgages, rent, and utilities.
Senator Marco Rubio (R-Fla.) chairman of the Small Business Committee was recently asked by reporters about including a method to measure which businesses qualify for additional PPP funds.
“I think everyone understands thatll have to be a part of it in the second round … So I think thatll most definitely, in my view, be a part of it,” said Rubio.
Sen. Susan Collins (R-Maine) told The Hill she also agrees that additional restrictions would be included in the second round of PPP aid.
“It would have a revenue-loss test … and it would probably also have a lower number of employees” as a ceiling to qualify, Collins told The Hill about the next coronavirus bill.
Collins indicated that it was their goal to have a draft by the time lawmakers return to Washington on July 20.
Since implementing the pandemic relief for small businesses, lawmakers have been looking at ways to improve the program to ensure those businesses that most need the funds actually get them.
Lawmakers recently changed the loan application date, since the effects of the pandemic continue to be felt and businesses are still not fully reopened. Congress also changed the allocation that the Treasury had established using 75 percent of the funds for payroll to 60 percent after businesses needs were taken into account.
The PPP has gotten bipartisan praise as being successful, but it has also come under fire because, during the programs initial stage, some large corporations disclosed that they were able to use loopholes to qualify for funds.
“We have all heard the stories — stories of big businesses with thousands of employees that found loopholes to qualify for these loans, universities with massive endowments accepting these loans, and even small businesses taking these loans when they havent seen a downturn in their revenue,” said Sen. Rick Scott (R-Fla.).
Sen. Ron Johnson (R-Wis.) said he supports using the remainder of the money in the PPP to create a new round of the program but wants a more targeted approach.
“Lets try and direct future financial aid to those workers those businesses that truly need it, and particularly those businesses that really are viable, can reopen, might need more capital, we just need to be smarter about how we approach it moving in the future,” Johnson said on CNBC.
The pandemic required, “we had to do something massive I think, by and large, that worked, but now we need to focus and really direct what were going to do in the future, based on what were dealing with right now,” added Johnson.
Lawmakers are currently negotiating ways to repurpose the leftover funds that would help smaller, hardest-hit businesses to tap into a more targeted second round of assistance. Senate Democrats have introduced a bill to permit small businesses to take out a second loan if they have 100 employees orRead More From Source