In a recent Senate hearing, Sen. John Kennedy (R-LA) proposed to spend the extra $100 billion from the Paycheck Protection Program (PPP) fund to help small businesses affected by the burning, looting and rioting sparked by the murder of George Floyd by Minneapolis police. Kennedy also plans to require authorities to seek civil damages against the looters.
Treasury Secretary Steve Mnuchin supports the repurposing of the PPP fund. But Sen Chris Coons (D-DE) has another idea. He wants to allow small businesses that had paid off their PPP loan to take another one.
There is still more than $100 billion remaining from the second tranche of the PPP fund since PPP lending flatlined in mid-May. The passage of the Paycheck Protection Program Flexibility Act may encourage more loan applications, but probably only marginally.
American Action Forum’s director of financial services policy Thomas Wade argued that some small businesses did not apply for loans because of uncertainty in loan forgiveness and fear of PR problems. But a survey conducted by the National Federation of Independent Business found that 77% of its members had applied for a PPP loan and 93% of whom had already received the money.