Congress has voted to extend federal program that provided low-interest loans to small businesses that would be forgiven if they kept paying their employees.
If President Donald Trump agrees, the paycheck protection program would be extended until Aug. 8. It had been scheduled to end Tuesday, with $134 billion in loans still available to be handed out.
The Senate passed the extension by voice vote on Tuesday and the House unanimously cleared the measure Wednesday.
“For Main Street New Jersey and small businesses, this will be very, very helpful,” said Eileen Kean, state director of the National Federation of Independent Business. “Hopefully there are businesses out there that will say, ‘The time has come. I should have done this already and I didn’t.‘”
New Jersey businesses took out 144,523 loans worth $17 billion through Saturday, according to the Small Business Administration.
Overall, the federal government awarded $519 billion to 4.8 million small businesses. Close to two-thirds of the loans, 3.1 million, were for $50,000 or less.
SBA Regional Administrator Steve Bulger said the agency has been reaching out to small businesses in low-income communities that may have not known about the program, and the extension will allow it to continue that effort.
“We welcome the opportunity to keep the program going and offer these loans to whoever needs them,” Bulger said. “There are companies out there. There are applications coming in every day. Our focus is that small segment that hasn’t gotten a PPP loan.”
The initial $349 billion program was so successful that Congress quickly added another $310 billion in funding.
But plenty of money remains, even after Congress agreed to let businesses spend 60% of their loan money on payroll rather than 75%, and give them 24 weeks rather than the current eight weeks to use the money.
“It kind of caught us by surprise,” Bulger said. “There was the expectation by everybody -- lenders, business groups, bankers, trade associations -- better get ready, it’s going to go quick. Numbers were big during the first week. Then it suddenly got kind of quiet and there was a noticeable fallout.”
As the coronavirus spikes in other areas, and states like New Jersey pause some reopening plans, Rep. Andy Kim, a member of the House Small Business Committee, said other steps need to be taken as well.
“Extending the Paycheck Protection Act deadline is a step in the right direction, but it’s not enough,” said Kim, D-3rd Dist. “This crisis isn’t over, and we need to stand by our small businesses and give them the full support they need until they can safely reopen and put New Jerseyans back to work.”
A bipartisan group of U.S. senators are looking at letting businesses apply for a second loan if they still can’t reopen, and letting them use some of their loan money to finance personal protective equipment such as masks and plexiglass guards.
“As the shutdowns have grown longer, it has become clear that millions of small employers need additional help if they are to keep their heads above water and survive,” said U.S. Sen. Susan Collins, R-Maine.