Today is the last day to apply for a PPP loan

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TOP LINE

The Trump administration’s paycheck protection program – a facility to support small businesses with forgivable loans during the worst of the pandemic – closes its application window after three months; with $ 134 million in funds still available and new coronavirus infections on the rise across the country, lawmakers have yet to decide what happens next.

HIGHLIGHTS

Confusion over loan cancellation requirements – and how the program works in general – could deter companies from asking for the remaining $ 134 billion, a CNBC report suggested earlier this month.

Congress is currently debating how to use this remaining money; a popular Democratic proposal is to allow small businesses to take out a second loan.

The staff of Sen. Marco Rubio (R-Fla.) Said a bipartisan task force is working on the next legislative step to relieve small businesses, the the Wall Street newspaper reported Tuesday.

Technical glitches, confusing guidelines and a bitter backlash against large state-owned companies – like Ruth’s Shake Shack and Chris Steak House – which received multi-million dollar loans marred the first weeks of the P3.

Months later, however, the PPP is seen as a major force behind the surprising job gains in May, when the United States added 2.5 million jobs instead of the 9 million loss that most. experts were waiting.

Crucial quote

“We are open-minded, but we absolutely believe that small businesses, and for that matter, many large businesses in certain industries, are absolutely going to need more help,” Treasury Secretary Mnuchin said at the meeting. ‘a Senate hearing on June 10. He also suggested that the next round of aid should be “more targeted” at specific industries.

Large number

As of June 27, nearly 4.8 million PPP loans had been approved. In total, these loans were worth a total of $ 519 billion.

Key context

The CARES Act, enacted by President Trump in late March, established the $ 350 billion paycheck protection program, which would provide forgivable loans to cover payroll and overhead costs and, hopefully, prevent mom-and-pop stores from closing. The program ran out of money in just two weeks after a first wave of applications. Congress then passed new legislation to restart the program with an additional $ 310 billion, including $ 60 billion earmarked for small businesses without existing banking relationships. Earlier this month, Congress passed a bill relaxing the forgiveness requirements for loans.

Disclosure: Forbes Media LLC confirmed on July 6, 2020 that it received a Paycheck Protection Program loan of $ 5-10 million on April 15.

Further reading

Mnuchin calls for more coronavirus relief spending as PPP hailed as success (Forbes)

Demand for paycheque protection program dries up (Forbes)

House passes bill to give small businesses more flexibility in using PPP loans (Forbes)

Five figures that sum up the struggling PPP program (Forbes)

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