As part of the plan to fight the Coronavirus and lockdown consequences, the Congress rushed to get hundreds of billions of dollars out the door to help small businesses amid a collapsing economy. As it was expected, this first round of relief had some glitches that are now being worked on.
According to a recent article published by Politico, banks have agreed to lend out more than $500 billion of the $670 billion allocated in the first phases of the small business aid package, known as the Paycheck Protection Program. But many employers are still complaining that the program’s hastily written rules are too stringent to help them stay afloat through the pandemic and keep their workers on the payroll.
Keeping these complaints in mind, a bipartisan group of lawmakers is plotting big changes as they prepare to consider another round of funding. Among the key proposals being considered in the House and Senate:
- Lengthening the time that small businesses can spend the money
- Allowing them to use less of the aid on trying to retain employees and more for expenses like rent
- Expanding the relief to larger companies
Policymakers are considering whether to change the structure of the program to resolve complaints that the terms for converting the government-backed loans into grants are too restrictive and out of touch with the realities of operating businesses in a lockdown.
But the most urgent problem for all businesses contemplating how to have their loans forgiven is the lack of detailed guidelines from the SBA and the Treasury Department on what to do next. The administration has yet to release comprehensive steps on how businesses should complete the process in the coming weeks.