Small businesses are getting an extension on the government’s coronavirus relief program.
The nearly $660 billion Paycheck Protection Program — aimed at bolstering cash-strapped small- to mid-sized companies amid the coronavirus pandemic — has been given a five-week extension following approval from Congress this week.
The bill, which now heads to President Donald Trump’s desk for a signature, would keep the program open to applications until August 8. It passed the Senate hours before it was set to expire at the end of the month, while the House unanimously approved the measure on Wednesday.
According to SBA data released on Tuesday, the program has provided more than $520 billion in emergency loans to upwards of 4.8 million companies. About $130 billion in allocated funds remain unclaimed as of the PPP’s deadline on June 30.
The small business grants were created as part of the federal government’s massive $2.2 trillion CARES Act, which was passed in late March in an effort to protect the coronavirus-battered economy by sending direct payments to millions of Americans, as well as offering financial aid to states and municipalities. The measure became the largest fiscal stimulus package in modern United States history.
Managed by the Small Business Administration, the PPP was designed to provide an incentive for companies to retain workers on payroll as widespread lockdowns led many employers to furlough or lay off their employees. The loans will be fully forgiven if companies use them for payroll costs, interest on mortgages, rent and utilities. Sole proprietors, independent contractors and self-employed people, as well as certain nonprofit organizations, are also eligible to apply.
Congress had initially put $349 billion into the PPP, but the money was exhausted in just under two weeks. It then injected the program with another $310 billion. Lawmakers involved in negotiations are debating a more targeted use of leftover funds in the next round of the coronavirus-related relief legislation.
Small business owners continue to grapple with an economic downturn and face an uncertain future as a new surge in COVID-19 cases threatens to stall their reopening plans. In the first three months of the year, the country’s gross domestic product — which measures the output of U.S. goods and services — contracted at a seasonally adjusted annual rate of 5%. What’s more, weekly jobless claims rose by 1.43 million last week, signaling that the labor market is still struggling to rebound after the biggest wave of layoffs in U.S. history.