The window for small businesses to apply for coronavirus aid through the Paycheck Protection Program closes on Tuesday night, but the remaining $135 billion in the fund may be repurposed as the economic fallout from the pandemic continues, Treasury Secretary Steven Mnuchin said Tuesday.
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"As relates to the PPP, I've already had conversations about the [Small Business Committee] in the Senate about repurposing that $135 billion and think that should be done," Mnuchin said while testifying before the House Financial Services Committee.
Mnuchin suggested the money could be directed to businesses facing the steepest losses from the outbreak of the virus and subsequent economic shutdown, including restaurants and bars.
"There appears to be bipartisan support in the Senate to repurpose the $130 billion for PPP, extending it to businesses that are most hard hit, that have a requirement that their revenues have dropped significantly, things like restaurants and hotels and others, where it is critical to get people back to work," he said.
Some lawmakers are now debating what to do with the leftover PPP money as a resurgence in COVID-19 cases threatens to derail the gradual recovery. There's a fear that once the PPP money fades, small businesses could see a wave of layoffs. According to a survey released by the National Federation of Independent Businesses last week, 14 percent of the companies that received PPP aid are considering laying off employees once they deplete the money. At least 70,000 of those businesses anticipate laying off at least 10 workers apiece.
Sen. Marco Rubio, the chair of the Small Business Committee, is working on legislation that would create new programs to expand uses for the funds, including allowing chambers of commerce to apply for the aid, according to The Washington Post, which obtained a copy of the proposal.
The bill would set aside $25 billion for businesses with fewer than 10 employees and prevent hotel or restaurant chains from receiving more than $2 million.
“PPP has been widely successful. There are more companies that could benefit from it. It would be great if extending the deadline would help them. But my sense is the greater need right now is in companies that have received that assistance but now need new or different kinds of assistance,” Rubio told the Post.
Another proposal by Sens. Ben Cardin, D-Md., Chris Coons, D-Del., and Jeanne Shaheen, D-N.H., would allow businesses with fewer than 100 employees to tap the taxpayer-backed fund for a second time if they can prove that they lost half of their revenue as a result of the outbreak of the virus.
Eligible businesses must have exhausted their initial PPP loan, or be on pace to spend the aid in order to qualify for another loan. The bill would also extend the loan application deadline for businesses from June 30 to Dec. 30 or later. A companion bill has been introduced in the House.