New bill would allow small businesses to apply for second PPP loan
PPP loan recipients may be able to apply for additional aid under a newly proposed bill. FOX Business’ Hillary Vaughn with more.
Small business owners on parole or probation can now apply for government-backed aid through the Paycheck Protection Program.
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The Small Business Administration officially amended its rule on Thursday, easing restrictions on potential borrowers with a criminal record.
SBA COULD RELEASE NAMES OF PPP LOAN RECIPIENTS BY END OF JULY
So long as the probation or parole did not take place in the last five years, business owners can receive aid through the PPP, the SBA said. Felons are still disqualified from tapping the rescue fund, but owners with pending misdemeanors are eligible to receive loans, the agency said.
Previously, the program excluded businesses if a loan applicant with 20 percent or more ownership of the company was in jail, on probation, on parole, under indictment or was convicted of a felony. Owners under arraignment or who pleaded guilty or no contest are also ineligible to participate in the program.
WHAT HAPPENS TO YOUR UNEMPLOYMENT BENEFITS IF YOU REFUSE TO GO BACK TO WORK?
But the SBA said the restriction should be limited to business owners charged with a felony involving "fraud, bribery, embezzlement or a false statement in a loan application or an application for federal financial assistance" in the past five years. For other felonies, the restriction is limited to just one year.
Last week, the American Civil Liberties Union filed a lawsuit against the SBA and Treasury Department arguing the loan program is wrongfully excluding business owners with a criminal past.
AT LEAST 4 MEMBERS OF CONGRESS BENEFITED PERSONALLY FROM PPP LOANS
Businesses have until June 30 to apply for a PPP loan, if they have not already done so.
As of Tuesday, more than 4.67 million loans worth close to $515 billion had been distributed through the PPP, leaving roughly $130 billion left in the fund.
The program was designed to help businesses with fewer than 500 employees weather the coronavirus pandemic and subsequent economic lockdown. Through the PPP, small businesses could receive loans of up to $10 million. If at least 60 percent goes toward maintaining payroll, the government will forgive it, essentially turning the money into a grant.
CONGRESS HAS FUNNELED TRILLIONS TO CORONAVIRUS RELIEF. WHERE IS THAT MONEY GOING?
During its initial launch, the program faced heavy scrutiny and criticism for granting multimillion-dollar loans to big, publicly traded companies.
At least 439 public companies received forgivable loans totaling more than $1.39 billion through the program, according to Washington, D.C.-based data analytics firm FactSquared. Of those companies, 69 returned the money, or roughly $436 million.
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