WASHINGTON – A popular small business loan program that closed last week when it ran out of money is about to get a cash infusion.
The House is expected to give final approval Thursday to legislation that would pump $320 billion into the Paycheck Protection Program, which is designed to keep small businesses from shuttering and their workers from going on unemployment during the coronavirus pandemic. The Senate approved the bill Tuesday.
Other programs also will get money under the bill. The $484 billion legislation includes funding for hospitals that have been overwhelmed during the coronavirus crisis and money for a new coronavirus testing program.
Here’s a look at what’s in the bill:
Small business loans
The Paycheck Protection Program was created under a $2.2 trillion package that President Donald Trump signed into law in late March to help Americans recover from the economic fallout of the coronavirus pandemic. That bill allocated nearly $350 billion for the program, which provides low-interest loans to small businesses. But the program proved so popular that it quickly ran out of money and was forced to shut down last week.
The latest legislation provides more than $320 billion to replenish the program and get it running again.
Some $60 billion of the new funding for the program will be set aside for community-based lenders, smaller banks and credit unions to assist smaller businesses that don't have established relationships with big banks and had a harder time accessing the funds in the first round of loans. Around $10 billion will be allocated for administration fees.
Hospitals that have taken a financial hit caused by a surge of coronavirus patients will get some relief under the bill. The legislation provides $75 billion in emergency funding for hospitals and health care providers.
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The availability of coronavirus testing remains a concern for some governors, who say they are running short on supplies even as the Trump administration insists there is an adequate number of tests.
The legislation provides $25 billion in start-up funds for a new coronavirus testing program, a provision pushed by Democrats during negotiations on the bill.
“It's now up to the administration to prepare a national testing strategy and implement those funds to proper effect before it is too late," said Senate Minority Leader Chuck Schumer, D-N.Y.
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Democrats also pushed for relief for state and local governments, which have pleaded for federal assistance to help them provide essential services during the coronavirus pandemic. But the final bill provides no emergency funding for them.
The funding could potentially be included in another economic recovery bill that currently is under negotiation by the White House and congressional leaders.
Meanwhile, a separate bill filed by Sens. Bob Menendez, D-N.J., and Bill Cassidy, R-La., from two of the hardest-hit states would set up a $500 billion fund to help states and local governments respond to the health and economic crisis while maintaining essential services. The money would be divided into three tranches and distributed based upon population, the number of coronavirus cases and revenue losses.
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