The Senate on Wednesday passed a bill that would give small businesses more time to use loans given to them to weather the ongoing coronavirus pandemic, as well as additional flexibility on how they can use the money.
The legislation cleared the House last week in a near-unanimous vote, passing 417-1. The measure briefly stalled in the Senate due to objections from some Republican senators who demanded changes, but the chamber reached an agreement Wednesday evening and sent it to President Donald Trump’s desk for his signature into law.
The bill would make key changes to the Paycheck Protection Program that Congress created earlier this year as part of its emergency response to the pandemic. The program gave small business owners forgivable loans so long as most of those funds were spent on their payrolls as part of efforts to keep millions of Americans employed.
The new legislation would extend the period small businesses are allowed to use loans to 24 weeks from eight weeks. It also would allow loan recipients to spend 60%, rather than 75%, of their loan proceeds on paying workers and still be eligible for loan forgiveness. The remaining portion of the loans can be used on other expenses need to keep businesses afloat.
Senate Democrats attempted to pass the bill via unanimous consent earlier Wednesday, warning that the eight-week period for borrowers who first received loans is set to expire next week before some states have fully re-opened and allowed many businesses to operate. According to a survey done by the National Federation of Independent Businesses, 23% of businesses that got loans will hit the eight-week deadline next week.
“Small businesses need predictability. We don’t have extra time,” Sen. Ben Cardin (D-Md.), the top Democrat on the Small Business Committee, said in a floor speech.
But Sen. Ron Johnson (R-Wis.) objected to the unanimous consent request.
Johnson expressed concern that the House bill requirement that businesses spend at least 60% of their loans on payroll is too high. He also questioned the provision to extend the loan program through December.
Johnson said he hoped to enter a letter into the congressional record clarifying the intent of Congress that the program expire at an earlier date before approving the bill.
“We’re so close,” Johnson said, indicating that he and other lawmakers were working on such a resolution. “Maybe we pass this yet tonight or early tomorrow morning.”
Sen. Mike Lee (R-Utah) echoed Johnson’s concerns about the bill.
Democrats, meanwhile, argued that small businesses couldn’t afford a delay.
“It would be very wise and helpful to all business to pass this bill now and then we’ll work in good faith on the small change,” Senate Minority Leader Chuck Schumer (D-N.Y.) said.
The chamber reached a deal later in the day, however, and the bill passed unanimously after a request from Senate Majority Leader Mitch McConnell (R-Ky.).
The loan program, one key part of the Cares Act that Congress passed in March, has approved more than $500 billion out of $660 billion in loans to small businesses. The pace of lending has slowed considerably in recent weeks.
Democrats have called for further reforms to the program to make it more equitable, as well as more detailed data on its recipients, including race, geography, and gender.
This story has been updated with Senate passage of the bill after it had stalled in the chamber earlier on Wednesday.
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