The U.S. Senate has passed a new stimulus package aimed at propping up the Small Business Administration’s aid program. And the news is cheering representatives from the retail industry.
“Retailers continue to deal with catastrophic hardships from COVID-19 and small retailers are the hardest hit,” Matthew Shay, president and CEO of the National Retail Federation, said in a statement today. “This measure will ensure that those who need assistance the most will receive it. It should be passed and signed into law before this health crisis turns into any more of an economic crisis than it already is.”
After weeks of negotiations, Congressional leaders from both parties reached a deal today with the Trump Administration on terms for this latest stimulus package, which reportedly will total $484 billion.
It is said to include at least $310 billion for the SBA’s Payroll Protection Program (PPP), plus another $60 billion for its Economic Injury Disaster Loan program. And after a push from Democrats, the bill also allocates $75 billion for hospitals, plus another $25 billion for virus testing.
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Following approval by the Senate, the legislation is expected to be passed by the House of Representatives on Thursday and then signed by President Donald Trump.
Notably, a fifth of the funds going toward PPP loans have reportedly been earmarked for smaller lending institutions, to benefit businesses that otherwise have difficulty accessing loans.
The process for doling out the initial SBA loans faced significant criticism, after a number of larger and more-sophisticated operations were able to receive approval fastest because of their skill at navigating the system. Notably, Shake Shake announced yesterday it would return its $10 million loan after seeing a backlash.
Shay emphasized the need for more funds to be widely distributed within the retail industry. “This assistance is too important to be given out on a first-come, first-served basis and limited to those who were the quickest to file their applications,” he said in the statement.
Last Thursday, the SBA announced that it had run out of money to fund the PPP, which was a component of the federal government’s $2.2 trillion CARES Act, passed in late March. The U.S. government had allotted an initial $349 billion in emergency loans for small businesses battered by the coronavirus pandemic.
According to NRF, nearly 200,000 small retailers have taken part in the PPP, receiving an average loan of $155,000 each for a total of $29 billion.