A relief program that threw a critical lifeline to small businesses during the coronavirus pandemic is responsible for a “majority” of the jobs created since May, according to Jovita Carranza, administrator of the Small Business Administration.
The $ 670 billion paycheck protection program, created when Congress passed the CARES law at the end of March, was officially closed to new applicants on Saturday.
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“I would say the majority of the 9.3 million jobs that have been retained are attributable to small businesses,” Carranza said in an interview with Edward Lawrence of FOX Business.
Since the program began in early April, more than 5.2 million loans worth about $ 525 billion have been distributed, according to Carranza. The program has helped save around 51 million jobs.
“This paycheck protection program has supported the small business economy,” Carranza said. “It also protected the wages of employers and employees. The paycheck protection program was essential to sustaining and mobilizing our national economy. ”
About $ 135 billion remains in the fund.
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As Democratic leaders and White House officials struggle to negotiate next round of emergency aid, some lawmakers debate what to do with the remaining PPP money amid a resurgence of cases COVID-19 and a new round of business closures that threaten to slow – or reverse – the economy’s gradual recovery.
As part of a trillion-dollar stimulus proposal unveiled by Senate Majority Leader Mitch McConnell last week, the money would be reallocated to more targeted aid to hardest-hit small businesses, who would be eligible for a second PPP loan.
Businesses that saw their revenues drop 50% or more in the first or second quarter of this year (compared to last year) could tap into the P3 for a second loan.
Aid would be limited to companies with no more than 300 employees, down from the initial limit of 500 workers established in the CARES Act. Part of the money would be reserved for companies with fewer than 10 workers.
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The proposal, written by Sen. Marco Rubio, R-Fla., And Senator Susan Collins, R-Maine, would also ease some of the restrictions on taxpayer-funded money. For example, businesses would be allowed to use the loan to purchase personal protective equipment for workers, investments that senators say are necessary to ensure owners can run their businesses safely during the pandemic.
Rubio and Collins have urged Congress to act unanimously on the PPP extension as talks on a larger stimulus bill advance.
“I believe the president and the cabinet are seriously working on providing another lifeline, an emergency financial lifeline for small businesses,” Carranza said.
There are fears that once the PPP money wears off, small businesses could see a wave of layoffs: According to a recent survey released by the National Federation of Independent Businesses, 14% of businesses that have received PPP assistance are considering to lay off employees once they become exhausted. money. At least 70,000 of these companies plan to lay off at least 10 workers each.
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