McConnell announces new round of PPP funds in GOP stimulus plan
WASHINGTON — Senate Republicans have announced another round of funding for the Small Business Administration’s Paycheck Protection Program as part of a new stimulus bill to deal with the coronavirus pandemic.
Senate Majority Leader Mitch McConnell, R-Ky., outlined the GOP plan in a floor speech but did not specify how much money would be allocated for the small-business loan program.
“So we have one foot in the pandemic and one foot in the recovery,” McConnell said. “The American people need more help. They need it to be comprehensive. And they need it to be carefully tailored to this crossroads. That is what this Senate majority has assembled.”
McConnell said the stimulus proposal, known as the Health, Economic Assistance, Liability Protection, and Schools Act, or HEALS Act, will include another round of $1,200 relief payments to individuals. Republicans are also proposing to extend the expanded weekly unemployment benefits that were provided in the Coronavirus, Aid, Relief, and Economic Security Act, but decrease the dollar amount from $600 per week to $200 per week.
McConnell's announcement comes as unemployment benefits in the CARES Act are set to expire at the end of this week. But PPP funds are still available. The program also allows loan borrowers to seek forgiveness of their outstanding credit. The SBA is expected to launch a portal next month for processing loan forgiveness decisions.
Banks have generally supported the PPP, but some lenders have said they are less enthusiastic about participating. Credit unions have supported the program but the industry's participation has been minimal, with CUs accounting for less than 5% of total PPP lending as of June 30. Only limited data is available, but there are indications that credit unions have also generally made small loans through PPP, in part because they are lending to very small businesses. One study pinpointed the average borrower as having 10 or fewer employees. Initial interest in the program spurred questions about whether PPP might compel more credit unions to take part in various SBA loan programs, but it remains to be seen if that has panned out.
Republicans still need to negotiate with Democrats before any additional stimulus legislation can become law. The Democratic-controlled House in May passed the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES, Act. Yet that $3 trillion package has been panned by the GOP.