At a time when many businesses have used up the funds they’ve received from the Paycheck Protection Program (PPP), U.S. Treasury Secretary Steven Mnuchin said in a televised interview that “bipartisan work” on a potential extension is underway.
Mnuchin said he has had “very productive conversations” with U.S. Senator Marco Rubio (R-Florida) and the two of them are going to have a conversation with U.S. Senator Ben Cardin (D-Maryland) next week. The secretary thinks that any extension involving the loan program will be “much, much more targeted to the businesses that really need this money and the smaller businesses.”
Mnuchin also addressed “enhanced unemployment” and said he heard stories of businesses seeking to get people back to work only to find that they won’t return because of the program. St. Louis Federal Reserve President James Bullard said on Wednesday (July 8) that the unemployment rate could fall to as low as 7 percent by the conclusion of this year.
“We knew that there was a problem with enhanced unemployment in that certain cases people were paid more than they made in their jobs.” Mnuchin said. “We’re going to make sure that people are incented to go back to jobs.”
In terms of PPP loan forgiveness, Mnuchin said, “The vast majority of these loans were hardworking businesses where the money went to pay employees, and they’ll be forgiven.”
“If there were companies that shouldn’t have received the money, we’ll deal with that as well,” he added.
Mnuchin indicated that PPP loans in excess of $2 million will go through a review before they are forgiven.
Some small business owners could receive additional help if Congress gives the green light to another round of PPP Loans per news in June. The Prioritized Paycheck Protection Program (P4) Act would let companies that have less than 100 staffers receive a second loan.
Companies have spent or foresee using up their first PPP loan and show a 50 percent revenue loss because of the coronavirus health crisis would be eligible.