The president signed a bill extending the Paycheck Protection Program, giving small businesses ravaged by the pandemic more time to apply for assistance.
WASHINGTON (CN) — President Joe Biden signed a bill Tuesday giving small businesses another 90 days to receive federal assistance for their payrolls.
The Paycheck Protection Program was first enacted in March 2020 through the CARES Act, providing an initial $310 billion for forgivable loans for small businesses to cover employees’ wages and certain business expenses like rent and utilities. Overseen by the Small Business Administration, the program known as the PPP quickly ran out of funds after approving 1.6 million loans, three quarters of which were less than $150,000.
While Republicans and Democrats were split about refunding the program late last year – with Democrats vying for added funding for hospitals and testing while Republicans sought a standalone measure – lawmakers were in agreement about the extension last week. The Paycheck Protection Program Extension Act of 2021, which Biden signed into law Tuesday, cleared the Senate by a bipartisan 92-7 vote last Thursday.
The extension will give businesses hit hard by the coronavirus pandemic until June 30 to apply for PPP loans. For the month of June, only applications processed by the first of the month will be accepted.
Joined by Vice President Kamala Harris and Small Business Administration chief Isabel Guzman, Biden said from the Oval Office on Tuesday the extension would lend a hand to small businesses left out of the first rounds of loans last year.
“Nearly 90,000 business owners are still in line and there’s money left,” he said. “Without somebody signing this bill today, there are hundreds of thousands of people who would lose their jobs and small and family businesses that might close forever.”
Nearly half of employed Americans get a paycheck from a small business, the president noted, adding that in the past three months the federal government had approved forgivable loans for 3.6 million small businesses. Of those businesses, 3.3 million have less than 20 employees.
Senator James Lankford, an Oklahoma Republican, said from the Senate floor last Thursday the PPP was broken. While businesses were only supposed to apply using their net expenses as funds to be covered by the program in the first round of payments, he said the Small Business Administration was allowing businesses to seek coverage of their gross expenses — a $5,000 to $10,000 difference in funds.
While Lankford rallied for an amendment to the extension limiting relief to small businesses that received less than their fair share of funding in original PPP loans, Maryland Democrat Ben Cardin objected and said there would be no program to amend if senators didn’t pass the legislation before week’s end and the March 31 deadline.
One of many bipartisan lawmakers who helped pen the PPP extension bill, Congressman Blaine Luetkemeyer said in a statement Tuesday that extending the program was essential to offer targeted assistance to small businesses.
“As jobless claims fell to their lowest since the beginning of the pandemic and unemployment claims dip substantially, it is clear that all states must safely reopen their economies,” the Missouri Republican said.