A new federal aid package designed to provide economic businesses still immobilized by the coronavirus just passed in the Senate.
The $484 billion in total aid passed after two weeks of negotiations between Republicans, who wanted to press additional small business funding forward without much reevaluation, and Democrats, who were eventually able to secure additional relief measures beyond the small business funding at the heart of the bill.
The focal point of the new legislation is the $321 billion it will allocate to the Paycheck Protection Program, a key feature of the first relief package. That program was beset by problems from the outset, with a huge portion of small business owners failing to secure the forgivable loans through banks even with prompt applications in the program’s earliest moments.
Within a few days of going live, it became clear the application process was plagued by issues and its massive $349 billion pool of funds had already dried up. Some small business owners also reported that they couldn’t find a bank to accept their application, as some banks prioritized existing customers.
Among those issue: Some of the money was sucked dry by entities that a program for small businesses probably shouldn’t be helping out to begin with. Remarkably, even hedge funds, major restaurant chains and Harvard University cashed in on the loans under the existing terms, while most owners of actually small businesses were left high and dry.
Companies with fewer than 500 employees were eligible for the loans, which become forgivable if the money is put toward payroll by hiring back or retaining employees. The maximum loan under the PPP is 2.5 times a company’s average monthly payroll, up to $10 million.
Out of the new $321 billion, $60 billion will go to smaller lenders who can provide loans to small businesses that might not qualify at major banks. Other measures Democrats secured in the new legislation include an additional $75 billion for hospitals and $25 billion for a national COVID-10 testing strategy.
The bill does not include any funding for a vote by mail system—federal funds that some Democratic lawmakers and a bipartisan group of state election officials views as essential for conducting safe voting this fall.
The latest relief bill, which President Trump has signaled he will sign, will now move to the House where it is expected to pass on Thursday.