Paycheck Protection Program Extension Bill Passes Congress

By Benjamin Cox on June 4, 2020 at 12:05pm

The U.S. Senate has cleared the way for extending the number of weeks small businesses have to use funds for the Paycheck Protection Program. The bill, which passed the House last week, passed unanimously in the Senate last night, now sending the bill to President Donald Trump for his signature.

The coronavirus program provides forgivable loans to help small businesses make their payrolls during the Covid-19 crisis. The bill would extend an eight-week period — when proceeds must be spent for loans to be forgiven — to 24 weeks or until the end of the year, whichever comes first. Businesses would also have as long as five years, instead of two years, to repay any money owed on a loan, and they could use a greater percentage of proceeds on rent and other approved non-payroll expenses.

The timing was necessary as many of the earliest recipients of the loan program had their spending period begin to expire last Friday. The extension will help many in the hospitality industry who were recently allowed to reopen.

Illinois Senator Dick Durbin says that he hopes with the passage of the bipartisan measures in the bill it will help keep people employed and allow small businesses to survive.

Since the launch of the PPP in early April, the program has provided loans totaling more than $22 billion to more than 183,000 small employers across Illinois. The overwhelming majority of borrowers are very small – according to the latest data, nearly two-thirds of all PPP loans are for $50,000 or less, and the average size of a PPP loan is just $114,000, suggesting an average employer size of about 10 employees.