Senators Postpone Measures to Change Small Business Lending Program

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The Senate has postponed a bipartisan proposal to extend the small business paycheck protection program and other changes to the initiative before setting off for a week-long hiatus on Thursday.

A bill from Senator Marco Rubio, Chairman of the Small Business Committee, Ben Cardin, the highest ranking Democrat and Senator on the panel Susan Collins and Jeanne Shaheen aims to extend the application deadline to the end of the year starting June 30, and to double the current eight week deadline for companies to use funds to get loans waived, Rubio’s office said.

The measure would also allow borrowers to use proceeds on personal protective equipment and ensure that lenders are not held liable for the certification and documentation that borrowers present during the loan process.

Marco Rubio

Photographer: Andrew Harnik / AP Photo / Bloomberg

Some senators unanimously asked for quick approval on Thursday. It was not immediately clear whether the Senate would approve the measure during a pro forma session on recess or wait for members to return to Washington in June.

Timing matters as the first companies to get credit after the PPP program opened on April 3 will see the eight-week lending deadline expire late next week and early June.

Independent senator Angus King and republicans Steve Daines Also on Thursday introduced a separate PPP bill to allow for a lending period of up to 24 weeks and other changes, including repealing a rule that 75% of proceeds must be spent on payroll as businesses spend more on rent and others Want to spend.

House Speaker Nancy Pelosi said the House would vote on a separate PPP measure next week. House legislators are discussing extending the deadline to 24 weeks and making other changes such as easing the 75% requirement on payrolls.

Republicans and Democrats alike have heard from business owners concerned about running out of money to pay their employees.

Finance minister Steven Mnuchin said the government is in favor of extending the eight-week deadline that would require action by Congress, as such a move does not require additional funding and is supported by both parties. However, he defended the 75 percent rule on payroll expenses, which the administration could change itself, saying it was the intent of the law.

“We want most of the money to go to the workers,” Mnuchin said Thursday at an online event from The hill Newspaper. “We believe the 75% matched exactly how the program was designed.”

The Paycheck Protection Program, at the heart of the $ 2.2 trillion aid package passed by Congress in March, enables loans of up to $ 10 million that can be waived if a company does within eight weeks on payroll and certain other expenses such as rent.

Read More: Mnuchin Says “High Probability” For More Virus Issues

The idea was to help companies retain workers while they were closed during stay-at-home orders and be ready to reopen after the bans were lifted. However, restaurants and other small businesses have indicated that they will need more time to spend the funds as they will not reopen or be fully operational after eight weeks.

“We are in the 10th week of the pandemic and I think it will be some time before our restaurants and our owners are back up to capacity and pre-Covid traffic.” Jose Cil, the CEO of the Burger King parent company International restaurant brandssaid President Donald Trump a meeting at the White House on Monday. Cil supported an extension to 24 weeks.

The $ 3 trillion Democratic bailout package passed by the House of Representatives last week and rejected by Republicans would extend the lending deadline to 24 weeks.

–Supported by Saleha Mohsin.

To contact the reporters on this story:
Daniel Flatley in Washington at [email protected];
Mark Niquette in Columbus at [email protected]

To contact the editors responsible for this story:
Joe Sobczyk at [email protected]

Laurie Asséo

© 2020 Bloomberg LP All rights reserved. Used with permission.


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