The U.S. House of Representatives is expected to vote Thursday on a $484 billion coronavirus relief package that would replenish a loan program for distressed small businesses. On Tuesday, the U.S. Senate approved the so-called “Phase 3.5” stimulus package by a voice vote.
“My hope is that this is the last time it has to be extended,” said Senator Todd Young (R-IN).
The original Paycheck Protection Program was funded by the $2.2 trillion stimulus package. The $349 billion earmarked for the PPP quickly ran out as a wave of businesses applied for the forgivable loan program.
“We’re putting the economy on life support at a time when we have mandated at the governmental level that people can’t go to work,” said Young in an interview with Inside INdiana Business.
In this current bill, money would be set aside for smaller banks to distribute. Banks with assets of $50 billion or less would get $30 billion to loan to small businesses. Another $30 billion would be allocated for banks with $10 billion or less in assets.
“So, the intention is to make sure our community banks and other financial institutions which often times serve underserved communities and much smaller, younger enterprises are able to tap into this loan funding,” said Sen. Todd Young. “That the bulk doesn’t go to those larger companies within that 500 or below employee set.”
Congress intended the loans to be used by small businesses with 500 or fewer employees to pay workers’ salaries, rent and utility costs.
There have been some high-profile examples of larger companies benefiting from the program, namely New York-based fast, casual restaurant Shake Shack, which received $10 million. The company said it will return the money.
“The intention of allocating toward smaller institutions is to address that problem,” said Young. “I believe we’ll need to put some more parameters around the program.”
Despite the furor over loans to bigger firms, Young said the average loan value nationally was $200,000, with a large portion of loans at $50,000 or less.
“So, the money is getting into the hands of small business owners and in turn their workers who can’t go to work at this time,” Young said.
The senator said Indiana has a disproportionate number of small and medium-sized enterprises that need the money. He said $7.5 billion was distributed to Indiana companies during the first round of funding.
“The sooner we can get back to work, that will alleviate the need to continue shoveling money out the door,” said Young. “We really need to focus in getting folks back to work.”
The U.S. House of Representatives is expected to vote Thursday on the bill.
Senator Young tells Inside INdiana Business it’s a tricky balance to get Hoosiers back to work soon, but safely.