House votes unanimously to extend deadline for coronavirus small-business loan program

Daniel Fowler
July 6, 2020

The Senate passed an unexpected extension of the Paycheck Protection Program Tuesday night, just a few hours before the $660 billion effort to aid small businesses was scheduled to cease receiving applications. "We are grateful for the Senate's quick work tonight and hope to see this extension pass swiftly in the House and head to the president's desk". However, some in the fishing industry complained that lending institutions they contacted were no longer processing applications for the program, even though almost United States dollars 130 billion (EUR 115.47 billion) of the USD 650 billion (EUR 577.36 billion) for the program remained available as of Tuesday, 30 June.

Why it matters: The extension comes as chunks of the US economy are again having to close down to try to contain the COVID-19 pandemic, threatening to reverse economic progress of the past month and deepen the recession.

Uncertainty around the rules of loan forgiveness is one of the factors that lenders say contributed to the Paycheck Protection Program still having $130 billion in its coffers for needy businesses.

The House passed the extension, which would keep the program open to applications to August 8, unanimously.

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Almost 75 percent of the loans distributed through the $610 billion program are worth more than $150,000, the agency said. Whatever the mechanism, senators made it clear that they want to include new federal aid for small businesses in the next stimulus package, which could come up for a vote later this month.

Democrats have been skeptical about how the program was being applied, particularly after it was reported that larger brands such as Shake Shack and Potbelly were eligible.

Treasury Secretary Steven Mnuchin has said that information would be given to lawmakers by the end of this week, after the current application deadline. "The Administration's breathtaking lack of transparency continues to raise serious questions as to why the Administration is failing to ensure this lifeline reaches the small businesses in our most impacted communities".

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