NJBIA was far from the only organization criticizing how the $670 billion Paycheck Protection Program (PPP) has been run, but the question remains, what, if anything, will be changed going forward.
The U.S. Treasury Department and the Small Business Administration (SBA), which run the program, have made a number of changes through guidance, including new instructions released on May 15, but anything more substantive will have to come from Congress.
Created at the end of March, PPP was designed to get money into the hands of businesses quickly after they were shut down in response to coronavirus.
The intent was to keep employees on business payrolls to prevent them from overwhelming the unemployment insurance system. To do this, the program promises to forgive loans as long as the bulk of the money is used to keep paying employees.
As NJBIA put it in a letter to the New Jersey Congressional delegation, “To the extent that the original intent of the PPP was to keep these employees on the payroll and off unemployment, it has largely failed for those businesses that were forced to close.”
NJBIA called for changing the 75% payroll requirement and eight-week expenditure from the receipt of money and refocus on the needs of small businesses that cannot reopen until governments allow.
In Washington, extending the June 30 deadline seems to enjoy widespread support as does extending the eight-week period.
The House of Representatives has already passed legislation that extends the coverage period to 24 weeks and eliminates the 75% requirement. But those provisions are included in a massive $3 trillion coronavirus relief bill that the Senate will almost certainly not agree to.
Thursday, the U.S. Senate tried to pass legislation that solely would have extend the covered period to 16 weeks before Congress adjourned for Memorial Day weekend, but was unable to hold a vote. Nevertheless, most Senators seem to support extending the timeframe.
Dropping the 75% requirement does not enjoy as much support, however. Earlier in the week, The Hill writer Jordain Carney reported that Senate Republicans “didn’t shut the door to changing the 75-25 requirement but warned that they wanted the program to stay focused on covering payroll and that the spending rule helped ensure that.”