May 19, 2020
By Caity Witucki
Contributing Editor, Hot Topic Tuesday
Hot Topic Tuesday — Rubio and Mnuchin Call for Significant PPP Revisions
Last weekend, the Wall Street Journal reported that lawmakers and government officials are planning to make significant revisions to the Paycheck Protection Program (PPP). These proposed changes come in response to criticism from small business owners who say they cannot get the funding they need to survive the pandemic. Although a complete list of the proposed changes has not been publicly revealed, Senator Marco Rubio and Treasury Secretary Steven Mnuchin have both suggested that the program could use more flexibility.
PPP was established to help small businesses make payroll for an eight week period following a brief shut down. However, many small business owners who received a PPP loan are now moving toward the end of their eight-week period and they are still unable to reopen their businesses. In response, Senator Marco Rubio, the Republican chairman of the Senate’s small business committee, says lawmakers will need to move fast to extend it.
On Sunday, Senator Rubio called for legislative action to extend the PPP program beyond the current eight-week time period. “We are hoping to move quickly on this before the first wave of PPP loan recipients reach the 8-week point,” Rubio Tweeted.
Additionally, Treasury Secretary Steven Mnuchin, indicated in an interview last week that he supported some other “technical fixes” such as giving businesses more flexibility to spend their PPP loan proceeds as needed. A possible response to the May 8, 2020 SBA OIG report which found that the SBA veered from the congressional intent of the program by requiring the borrower to spend 75% of their loan on payroll-related costs.
Changing the 75% rule does not require legislative action, says a spokesman for Senator Rubio. However, extending the eight-week period for using the funds does.