Editor's Note: Since the time of writing, the President has signed the bill into law, extending the existing PPP loan application period to August 8th.
Senate Democrats forced a vote late last night to extend how long businesses have to apply for Paycheck Protection Program loans. The unexpected move came just hours before the June 30 deadline, and surprisingly passed the Senate through unanimous consent.
But despite the last minute move to push the deadline back to a new, August 8 date, the program remains closed as of July 1 since the extension still needs to pass the House and gain the President’s signature.
At the time of writing, there’s no established timeline for the passage of the bill, but lawmakers are working up against the Summer recess which will take place following the July 4 weekend.
While the first $350B round of funding was rapidly depleted, more than $130B in funds still remain from the second round—and demand has been sparse for weeks. One reason the move to extend the deadline may have passed so easily, some lawmakers speculate, is because it was an easy way to keep an essential federal lifeline open to struggling small businesses as Congress works on the next, arguably more important stimulus package.
According to CNN, even with the extension, lead Republican negotiator on PPP Sen. Marco Rubio (R-FL) doesn’t see many more small businesses requesting the SBA-backed loans.
I have no objection to extending the #PPP deadline until August 8th.— Marco Rubio (@marcorubio) June 30, 2020
But the vast majority of #SmallBusiness that wanted to benefit from the program have already used it.
What we really need to pass very soon is targeted help for those who need a second round of aid.
“The vast majority of small businesses that wanted to benefit from the program have already used it," Rubio said. "What we really need to pass very soon is targeted help for those who need a second round of aid.”
The extension of PPP loan originations is unlikely to have a major impact on the banks working with small businesses on the special SBA loans. The extension does nothing to materially change anything other than the originations deadline.
Sen. Ben Cardin (D-MD), the lead Democrat on the Senate Small Business Committee who forced the floor vote, told his fellow legislators as much as he urged them to back the legislation.
"The resources are there, the need is there, we just need to change the date," Cardin said.
As the story continues to develop, our team is tapping sources close to the legislation and keeping an ear to the ground in order to help our banks and credit unions stay as up to date as possible on the Paycheck Protection Program.
The best way to get the latest information from the Numerated insights team is to keep an eye on our blog and to remember to tune into our Weekly Tuesday Q&A Sessions and Friday Platform Demos.
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