July 27, 2020
Details of what could be included in the next stimulus package are slowly emerging. For business owners, new Paycheck Protection Program (PPP) measures could bring renewed access to forgivable loans and more funds.
GOP lawmakers and Senate Majority Leader Mitch McConnell have begun discussions about what might be included in the proposal. It’s the first public look at what the Senate is considering. Here’s what we know so far.
Prioritized Paycheck Protection Program Act
A bill introduced in both houses of Congress in June, the Prioritized Paycheck Protection Program (P4) Act, would allow businesses with fewer than 100 employees to apply for a second loan if they have used up (or are on pace to exhaust) their first PPP loan and can show a 50% loss in revenue due to the COVID-19 pandemic.
The P4 bill would set aside the lesser of $25 billion or 20% of PPP funds for employers with fewer than 10 employees and businesses in underserved and rural communities. The loans would not be available to public companies.
There's been widening support for streamlining the PPP forgiveness process. While certain loans are now eligible for the EZ loan forgiveness application, there's greater interest in easing things further for smaller businesses by automatically forgiving all PPP loans under $150,000 or $250,000. On that note, Treasury Secretary Steven Mnuchin at a Small Business Committee meeting confirmed interest in blanket forgiveness. "Yes, that's something we should consider," he told lawmakers.
Extending the Paycheck Protection Program
Neil Bradley, the U.S. Chamber of Commerce's Executive Vice President and Chief Policy Officer predicts that the PPP will continue. At the very least, he says, there will be a continuation of the program, which was recently extended through August 8th 2020.
It's also possible the PPP will become more targeted. Senate Majority Leader Mitch McConnell said Republicans also support the second round of PPP funding, which provides loans to businesses with fewer than 500 employees. "With a majority of businesses expected to exhaust their initial paycheck protection funding this summer, we'll also be proposing a targeted second round of PPP, with a special eye toward hard-hit businesses," McConnell said.
Senate Republicans released details about its proposal for the second stimulus package. Congress is pushing to approve the next stimulus bill by August when it will adjourn for recess. Nothing has been finalized or signed into law.