Senate passes extension of Paycheck Protection Program

The Senate has passed an extension of the popular Paycheck Protection Program for small businesses, which was set to close down Tuesday night with $130 billion in funding left over.

The extension to Aug. 8 was offered by Senator Ben Cardin, a Maryland Democrat, and cleared the chamber by unanimous consent. The House has yet to take up the bill but could pass it as soon as Tuesday night.

The Small Business Administration, which ran the PPP with the Treasury Department, is set to stop accepting new applications at 11:59 p.m. Eastern Time on Tuesday. The $669 billion program had approved more than 4.8 million loans totaling $520.6 billion as of Tuesday night, the SBA said. There was $134.5 billion remaining as of Saturday that will be returned to Treasury unless Congress re-purposes it.

Cardin said that the June 30 deadline was a “reasonable assumption” when the PPP program was established in March. “We thought by the end of June that our economy would be back on track and we would not need to have additional applications after that date.”

PPP loan money used for payroll in accordance with guidelines do not have to be repaid.

Senator Rick Scott, a Florida Republican attempted to amend the extension to limit future loans to the most needy businesses, but dropped that attempt in the face of objections from Cardin, who said the PPP could be modified in the next round of stimulus.

Senator Susan Collins, a Maine Republican, said that the PPP was likely to be modified next month so that businesses must show revenue losses in order to qualify for future loans.

The Senate is about to leave on a two-week recess on Thursday amid a worsening economic outlook because of a resurgence of the coronavirus. Senate Majority Leader Mitch McConnell said earlier Tuesday that the Senate would take up and debate another virus relief package in late July.