By Benjamin Fearnow
Media Reporter
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President Donald Trump on Saturday signed legislation that extends the application deadline for small businesses to join the Paycheck Protection Program (PPP). Here's how it aims to help Americans climb out of the pandemic economic downturn.
The U.S. Senate on Saturday unanimously passed a short-term extension of the PPP through August 8, which was set to end last Tuesday before lawmakers highlighted that $130 billion still remain in the fund.
The program overall seeks to provide government subsidies to small businesses that allows them to maintain their payroll, hire back employees who may have been laid off during the coronavirus pandemic, and to cover applicable overhead.
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PPP was first passed as part of the March CARES Act and is implemented by the Small Business Administration, which allocated $660 billion for small businesses which apply.
"The Paycheck Protection Program provided a critical lifeline to more than 4.8 million small businesses," Florida Republican Senator Marco Rubio, chairman of the Senate Committee on Small Business and Entrepreneurship, said in a Saturday statement.
"As the scope of the financial damage done to small businesses by the pandemic and resulting lockdowns has grown, it has become clear that longer-term support is necessary. I thank Ranking Member [Ben] Cardin and Senators [Susan] Collins and [Jeanne] Shaheen for their tireless work to ensure small businesses and their employees could survive the first wave of the coronavirus crisis. I will continue working with them and the rest of our colleagues to pass additional support for our smallest businesses, especially in our undeserved communities, and provide long-term recovery resources for industries particularly hit hard by this crisis."
Since Congress first passed the PPP legislation in March, the program has paid out around $520 billion in loans to nearly 5 million small businesses across the country. The initial bill was only meant to cover small business costs for two-and-a-half months before Trump signed the extension Saturday.
The subsidies provided to the businesses come as federal loans, but the loans are set to be forgiven if the businesses use at least 60 percent of the funding to pad their employee payrolls.
Rubio joined several top Trump administration officials, including Treasury Secretary Steve Mnuchin, in urging small business owners -- particularly minority-owned small businesses -- to apply for PPP benefits before the new August 8 deadline.
The Paycheck Protection Program first drew criticism in April after reports showed several corporate chains and massive businesses successfully applied for the loans. At least $10 million was received -- and in many cases paid right back -- by multimillion-dollar companies including Potbelly, Quantum and New Age Beverages.
Newsweek reached out to both the White House and Rubio's Washington office for additional comment.
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