House passes COVID-19 relief package to replenish PPP loan funding
On Thursday, the House passed the newest federal stimulus package aimed at providing financial relief for businesses and institutions hit hard by the COVID-19 crisis.
The bill lingered in the Senate for two weeks of debates, with Republicans seeking to pass a less comprehensive version of the legislation and Democrats working to weave other funding into the package. In the end, the interim legislation will allocate $310 billion to replenish the SBA's Paycheck Protection Program (PPP), $75 billion for hospitals and $25 billion for COVID-19 testing. The bill also includes additional funds for the Economic Injury Disaster Loan (EIDL) program.
The funding for tests comes with specific requirements for the Trump administration to formulate a "strategic plan" in coordination with states to expand national testing capacity - a key effort that public health experts say is necessary before states begin to reopen for business.
For small businesses around the country, many devastated by the ongoing crisis, the SBA program for forgivable loans began with hope but quickly descended into frustration. The loans are intended for small businesses to put toward payroll and if used to retain employees, they turn into grants. Many small business owners, scrambling to find banks handling PPP loans, were shut out of the program shortly after applications went live. Others never heard back about the loans and still remain in limbo. Within days, the funds had dried up.
Large banks are accused of eschewing a first-come-first-served system, instead doling the loans out preferentially based on their potential to make money. Some relatively large businesses also used gaping loopholes in the program to soak up the free funds. In one example, the restaurant chain Ruth's Chris Steakhouse secured $20 million, which the company now says it will repay.
Democrats fought to include new carve-outs that could address some of these problems, and the final bill allocates $30 billion in loans for banks and credit unions with $10 to $50 billion in assets and another $30 billion for banks with less than $10 billion in assets.
The president previously expressed his approval of the bill and his intention to sign it and make the funds available as quickly as possible.
