The Paycheck Protection Program (P.P.P.) Is Ending, With Money Left Over

After a stumbling start, the government’s centerpiece relief program for small businesses was closing down on Tuesday — although it may turn out to be a temporary hiatus.

In just three months, the Paycheck Protection Program handed out $520 billion in loans meant to preserve workers’ jobs during the coronavirus pandemic. But as new outbreaks spike across the country and force many states to rethink their plans to reopen businesses, the program had more than $130 billion still in its coffers.

It might not be gone for long, though. Late Tuesday, just a few hours before the program was scheduled to shut down, the Senate approved a five-week extension. It wasn’t clear when the House might take up the bill.

John Lettieri, the chief executive of the Economic Innovation Group, a think tank focused on entrepreneurship, praised the program, calling the aid it provided to small businesses “a major achievement.” But there was still work to be done, he said.

Lenders cited two main reasons there was money left over. First, most eligible companies that wanted a loan were ultimately able to obtain one. (The program limited each applicant to only one loan.) Also, the program’s complicated and shifting requirements dissuaded some qualified borrowers, who feared they would be unable to get their loan forgiven.

Trying to comply with those rules was a challenge for many businesses.

Tracy Singleton closed her farm-to-table restaurant in Minneapolis, the Birchwood Cafe, in mid-March and laid off all but a handful of her 62 workers. She received a $382,200 loan in early April, a week after the program began, and soon spent it all — even though she won’t be fully reopening any time soon.

Ms. Singleton said she might have chosen to spend the money more slowly if things had been different. “But I had to go with the rules as they were at the time,” she said.

When she received the loan, businesses had just eight weeks to spend the cash if they wanted to have the loan completely forgiven. So Ms. Singleton, who had switched to curbside pickup sales, brought back dozens of workers, brainstorming new projects for them to tackle. Her payroll ballooned from a skeleton crew of eight to a peak of 48 employees.

But as the clock ticked down to the end of her eight weeks of support, it became clearer to lawmakers that the downturn wasn’t ending anytime soon.

Congress amended the loan program in early June to give recipients nearly six months to use their aid money, but Ms. Singleton had already spent most of her funds. When the money ran out, she laid off workers again. She is down to a staff of about 20.

“We looked at this as a bridge,” she said. “Then our time was up, and there’s no solid ground to stand on yet.”

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