Small businesses shouldn't expect more flexibility for spending PPP funds: labor secretary

Scalia touted PPP as an 'extraordinary success'

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Small businesses should not expect to be given more flexibility in how they can spend forgivable loans provided by the federal government's Paycheck Protection Program (PPP), Labor Secretary Eugene Scalia said Tuesday.

PPP loan recipients are expected to allocate 75 percent for payroll expenses during the coronavirus pandemic, but the remaining 25 percent can be put toward rent, mortgage interest, utilities and interest on other debt obligations.

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Scalia touted PPP as an "extraordinary success."

"Its greatest challenge has been its popularity," Scalia said. "In the first round of funding, we had 1.6 million businesses get loans. In this latest round, already 2.2 million U.S. businesses getting loans."

Waiter Marcos Huerta, right, serves a grill of fajitas at El Tiempo Cantina Friday, May 1, 2020, in Houston. (AP Photo/David J. Phillip) (Associated Press)

Businesses including restaurants and retailers have complained about the 75-25 split, saying they need to be able to spend more on non-payroll expenses.

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"This program was designed as a Paycheck Protection Program," Scalia said. "It was meant to help workers in substantial part. It won't be all things to all people. The Treasury, the Fed have other programs that are also available to help small businesses."

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More than 3.8 million Americans filed for unemployment during the week ending April 25, pushing the six-week total of job losses to 30.2 million, according to the Labor Department.

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