If you’re one of many small business owners needing more loans to survive the coronavirus pandemic, then you’re no doubt wondering how long you will have to wait until you can apply for business loans again. The Senate has proposed expanding Paycheck Protection Program (PPP) loans as part of the HEALS Act stimulus package. The Senate would inject new money into the PPP and allow some businesses to apply for a second loan. The House version would extend the deadline to apply for PPP loans, but would not add more money to the PPP. How long will you have to wait until you find out what is passed and if you can apply for more loans?
Congress Has a Deadline of August 7 for the New Stimulus Package, Which Might Include Expanded PPP Loans
The Continuing Small Business Recovery and Paycheck Protection Program Act (CSBR PPP Act) could add new loans and expand what qualifies for loan forgiveness. This is part of the Senate’s HEALS Act (Health, Economic Assistance, Liability Protection, and Schools). It’s the Senate’s response to the House’s HEROES Act.
Sen. Marco Rubio introduced the Continuing Small Business Recovery and Paycheck Protection Program Act on July 27 and it has since been referred to the Committee on Small Business and Entrepreneurship. While the Senate’s bill injects another $190 billion into the PPP and lets businesses request a second loan, the House’s HEROES version doesn’t add more money to the PPP. It simply extends the deadline to December 31.
Both versions would eliminate the 75% payroll requirement, CNET reported.
Mitch McConnell has set a deadline of August 7 to put approve a new stimulus package, which might include this expanded Paycheck Protection Program, CNET reported. This deadline is the Senate’s last day in session before the Senate recess. If an agreement isn’t reached by then, there could be a longer delay before businesses could possibly apply for a second loan. The next session won’t start until September 8, unless McConnell pushes back the recess.
If an agreement is reached by August 7 and the bill is signed into law, there will still be some time before the second loans start being distributed by banks and institutions. But with the framework already in place, it will likely be faster than the first time around.
Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi spoke with This Week on ABC News about the deadline and the negotiations over the weekend.
Pelosi said about the House’s Act: “We just still haven’t come to agreement. We started this March 4. Our first bill was testing, testing, testing. Our most recent big bill, with the expansion of the PPE, was about testing, testing. But it still has not been implemented by the administration.”
Pelosi didn’t give an idea in the interview of when a deal might be reached. She said: “It will be close to an agreement when we have an agreement.”
Mnuchin said: “There’s obviously a need to support workers and support the economy. People through no fault of their own are shut down because of this terrible disease. On the other hand, we have to be careful about not piling on enormous amount of debts for future generation.”
He added that certain topics, like PPP and checks in the mail, have strong bipartisan agreement.
“There’s definitely areas of agreement,” Mnuchin said. “Things like the PPP, I think there’s enormous bipartisan support. Things about checks in the mail, I think there’s enormous bipartisan results.”
The Paycheck Protection Progam’s Second Round of Loans Is Part of a Senate-Backed HEALS Act
This new Senate HEALS bill would provide an additional $190 billion for PPP loans and second-draw PPP loans, Forbes reported. The original Paycheck Protection Program provided $531 billion in one month, which was distributed by banks and other financial institutions to businesses that applied for the loans. This original PPP had some operational issues, followed up with questions later about the worthiness of certain businesses that received loans.
In the Senate’s proposal, businesses could apply for first-time or second-draw loans. The second-draw loans would have new requirements, CNBC reported, including being limited to businesses with 300 employees or fewer and at least 50% less gross revenues.
The bill would also change certain aspects of when to apply for forgiveness and the period in which forgiveness is eligible. For example, all borrowers who receive $150,000 or less would have their loan forgiveness if they meet certain attestation requirements.