Just hours ahead of the June 30 deadline for small business owners to submit applications to the CARES Act Paycheck Protection Program (PPP), the U.S. Senate passed by unanimous consent bipartisan legislation to extend the deadline to August 8. The House quickly followed suit yesterday, sending the bill to the President.
With an estimated $130 billion remaining in the program, the application deadline for new PPP loans was set to pass at the end of June. The PPP has been a welcome lifeline for small business owners who were able to take loans to meet payroll and other expenses with the potential to have the loan fully forgiven if certain guidelines are met. While the PPP received negative reviews from borrowers who struggled with meeting the initial loan eligibility and forgiveness requirements, increased program flexibility passed by Congress has generally been well-received. Read more about the extension here.
With the PPP extension enacted, Congress will turn in the work period following the July 4th recess to further COVID-19 stimulus/relief efforts. We expect provisions addressing small business concerns to remain front and center. Despite its initial success, demand for PPP loans has fallen off significantly in recent weeks, and interest from participating banks is waning.
Expect a wide range of bipartisan proposals to be circulated in the coming weeks, including efforts to build upon the PPP, but also to create new programs or to build upon existing governmental authorities. For example, there is bipartisan, bicameral interest in increasing the government guarantee percentage for the SBA’s regular 7(a) business loans – which have dried up during the pandemic.
Proposals under consideration include, but are certainly not limited to the following:
ML Strategies is actively engaged in advocacy efforts related to the PPP and other potential COVID-19 response measures under consideration by Congress and the Administration and will follow-up with further updates.