Small businesses are getting a second chance for approval under the Paycheck Protection Program. The Small Business Administration said Monday that more then $2 Billion in loans were returned by companies approved during the first round of loans.
To show the program’s importance during economic turmoil, a joint statement released Friday by the Treasury Department and the SBA emphasized the program’s potential to create and preserve jobs.
“The Trump Administration is fully committed to ensuring that America’s workers and small businesses continue to get the resources they need to get through this challenging time,” the statement reads.
The PPP allows banks to offer federally subsidized loans at terms not available on the private market. Approved borrowers get an interest rate of just 1 percent and can have the loan forgiven completely if they keep paying employees during the crisis.
The Paycheck Protection Program is a critical component of the $2 trillion federal stimulus program meant to combat the economic crisis brought by the coronavirus. The program empowers banks to offer federally subsidized loans at terms unavailable on the private market. Borrowers get an interest rate of just 1 percent and can have the loan entirely forgiven if they keep paying employees through the crisis. Small businesses are allowed to self-certify that they qualify for the funds, allowing lenders to bypass much of the paperwork usually required for loan approvals.