The forgivable loan program aimed at helping small businesses ravaged by coronavirus restrictions keep afloat and retain employees will end this Saturday if Congress doesn’t agree on a third stimulus bill that would extend it.
The Paycheck Protection Program, co-written by Sen. Susan Collins, R-Maine, and changed in June in a bill pushed by Sen. Angus King, I-Maine, might be extended in a new stimulus package to allow those who already have one loan to get a second and the very small businesses that haven’t received a loan to get one. But that might not happen before the current program sunsets.
“We’re waiting to see how this all shakes out, but stay tuned, because there could be additional modifications to the program,” said Amy Bassett, director of the U.S. Small Business Administration’s Maine office, on a virtual call with state business owners on Wednesday.
Congress is still debating what should go into the new stimulus bill, including whether an expanded unemployment benefit of $600 per week that it let expire on July 31 should be extended in some manner.
Bassett said the forgivable loan program and the agency’s Economic Injury Disaster Loan were widely used in Maine. Some 27,900 Maine companies received a total of $2.3 billion in paycheck protection loans through July 31, she said. Another 17,084 received economic injury grants of up to $10,000 for a total of $53.2 million statewide and 9,200 businesses received economic injury loans totaling $533.6 million.
Some $120 billion still is available nationwide for the paycheck protection loans until Saturday, she said.
The paycheck loans can be forgiven if a company spends 60 percent of the loan on payroll and has retained or brought back all of the employees it had. Applications for forgiveness open Aug. 10.
Bassett said loan holders must be able to certify that they brought back all of their employees, but that could pose challenges to businesses that have not ramped back up to full employment.