Late July 1, the Senate voted to approve another extension to the Payroll Protection Program, a program run by the Small Business Administration. Once the extension bill is signed, the PPP will continue to accept applications from small businesses through August 8.
Initially founded as part of the CARES stimulus act passed in March, the PPP issues loans to small businesses struggling with the economic impact of the COVID-19 impact and forgives loans to businesses that retain their employees or spend a certain amount of the loan on payroll expenses.
The program became operational in early April and was extended by a later bill through June 30. The extension also adjusted the conditions required for loan forgiveness as well as the kinds of businesses that could receive loans. The initial legislation for the PPP only allotted $349 billion to the SBA program, but that number has since nearly doubled: To date, more than $660 billion has been approved by the government for use in PPP loans. According to Reuters, more than 4 million businesses have received loans from the program to date, with most of the loans coming in at under $150,000.
The novel coronavirus outbreak hammered unemployment through March, April and May, and while the rate of workers applying for unemployment benefits has dropped significantly since it shot up to over 6 million towards the end of March, it still remains at higher than twice the pre-pandemic record. During the week of June 25, the Bureau of Labor reported that 1,480,000 people applied for unemployment benefits. The pre-2020 weekly record, set in 1980 during the savings and loan crisis, was 695,000 initial claims.
The new extension comes as rising rates of new COVID-19 cases in the United States have renewed concerns over a potential “second wave” of infections—which could be accompanied by a second wave of quarantines, with all the economic devastation of the first. According to Reuters, the United States recorded almost 50,000 new cases on July 1. To date, there are 2,686,480 active cases of the virus in the United States today. About 128,062 people in the U.S. have died of the virus, and 729,994 have recovered, according to data collected by the Johns Hopkins University of Medicine.
