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House Passes Paycheck Protection Program Expansion: $310B Boost To Small Biz
Small businesses including solution providers are eager to apply for the additional funding, after the initial $349 billion round fell far short of the need.
A badly needed $310 billion expansion to the federal Paycheck Protection Program for small businesses passed the U.S. House of Representatives on Thursday, though there are indications that the measure still may not go far enough.
The House approved the new funding following the Senate's passage on Tuesday. The money is part of a $484 billion bill to benefit small businesses and hospitals, amid the COVID-19 coronavirus pandemic and the resulting economic upheaval. President Donald Trump has signaled he will sign it into law.
[Related: Paycheck Protection Program: 5 Things You Need To Know]
The additional Paycheck Protection Program (PPP) funding comes after the initial $349 billion in funding for the program ran out quickly earlier this month, prompting some solution providers to criticize the program’s rollout.
Solution providers have applauded the addition of a second round of funding, though some say there is still likely to a be greater need among small businesses than the amount that lawmakers approved.
"This is definitely helping with some of the short-term, immediate needs. But I think there's going to be more needed for the long-term recovery," said Allen Falcon, CEO of Westborough, Mass.-based Cumulus Global. "I expect a few weeks from now we may be talking about a third round of funding. We'll have to see what the need is."
Currently in the U.S., "some areas of the country are trying to open up. If it's too early, then they'll open and close down again, and you'll have a yo-yo effect," Falcon said. "Other places are being more conservative. Is it going to be too long for businesses to hold out? It's still week by week, day by day."
Mark Sanchez, CEO of Loganville, Ga.-based CommQuest, told CRN that his firm is among the solution providers that applied in the initial PPP round, but was unable to receive approvals before the funding program was exhausted.
"I'm very happy they've decided to do the right thing by small businesses," said Sanchez, whose firm employs one other full-time individual besides himself. "Small businesses are the lifeblood of this country, and if they're not investing in those individuals, that's a misplaced use of money."
The PPP provides loans for up to two months of payroll costs plus an additional 25 percent for businesses of 500 or fewer employees, with a cap of $10 million. Much of the 1-percent interest rate loans could be forgiven if businesses do not lay off workers and utilize the funds for payroll and other designated purposes.
While “lawmakers from both parties are already talking about pursuing more large spending bills” to provide coronavirus relief, the measure passed Thursday “could be the last one for at least several weeks as divisions emerge between the parties about how much more to do,” the Washington Post reported.
The PPP got off to a rocky start when the Small Business Administration launched it April 3. Some lenders, already besieged by an influx of applicants, received late guidance from the government that forced them to change their applications after they had begun accepting them. In addition, the SBA’s online application portal crashed on April 6, according to reports.