Businesses damaged by looting could be helped by leftover PPP cash in new proposal
There's about $130B remaining in the Paycheck Protection Program
Treasury Secretary Steven Mnuchin will testify Wednesday on small business relief. FOX Business’ Edward Lawrence with more.
When the government stops accepting applications for the Paycheck Protection Program, there will almost certainly be billions of dollars leftover in the coronavirus aid fund — and one Republican senator thinks the money should go toward businesses devastated by recent looting and vandalism.
Sen. John Kennedy, a Louisiana Republican, proposed the idea during a Senate Small Business Committee hearing on Wednesday about the $2.2 trillion CARES Act.
In the two months since it was launched, the PPP has directed more than $530 billion in loans to 4.5 million businesses, leaving about $130 billion in the fund. Businesses have until June 30 to apply for the aid, making it unlikely the program will exhaust all $659 billion in funding before that deadline.
“I am going to introduce a bill that I would like you and your ... colleagues at the Treasury to look at to take some of that money and make it available to the businesses, mostly small businesses, but to the businesses that have been lost as a result of the burning and the looting and the felony rioting,” Kennedy told Treasury Secretary Steven Mnuchin during the hearing. “I think they’re going to need help.”
Angry and sometimes violent protests intended to denounce systemic racism and police brutality have gripped the nation in the weeks since George Floyd, a 46-year-old black man, died after a white Minneapolis police officer pressed his knee into his neck for at least eight minutes.
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Tense standoffs between protesters and police have sometimes descended into destruction; looters have targeted small businesses, along with big retailers like Target, Apple and Lululemon, smashing windows, burning property and stealing goods. In some cases, protesters scrawled graffiti on storefronts, writing “I can’t breathe” -- a reference to Floyd’s last words, a rallying cry for the movement -- or other phrases in support of the Black Lives Matter movement.
“Some component of this extra money we did not anticipate we’d be able to put to work, but we’d love to work with you on repurposing it,” Mnuchin said.
He added: “We’re more than happy to follow up on that with you.”
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Kennedy also asked the Treasury Department and Small Business Administration to look into how much the rioting cost. He said he planned on including a provision in his bill that would require authorities to seek civil damages against looters to offset the cost of the financial aid.
The initial tranche of $349 billion in small-business funding evaporated within 13 days; lawmakers and small business owners expected the same to hold true during the second round of funding, which relaunched on April 27, after Congress injected another $310 billion in the forgivable loan program.
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But demand for the program has cooled, despite federal efforts to alleviate borrowers’ concerns that loan restrictions are too strict -- like changing the percentage of money that needs to be spent on maintaining payroll to 60 percent from 75 percent in order for the loan to be forgiven.
Small businesses employ close to 60 million people, or almost half of the entire U.S. workforce, according to the Small Business Administration.