WASHINGTON—Treasury Secretary Steven Mnuchin said an effort is underway to make repairs to the Paycheck Protection Program that would help restaurants and others participate in the $660 billion program.
As CUToday.info has reported, the PPP’s forgiveness requirements mandate borrowers spend 75% of the loan on worker salaries, and for the forgivable amount to be spent over an eight-week period. But that has drawn objections from many business owners who say they need more money for rent and other overhead costs and from industries that remain mostly closed, as mandated by state regulations, the Wall Street Journal reported.
The National Restaurant Association, for example, has suggested the period should begin at least three weeks after applicable state restaurant closures are lifted, according to the report.
“One of the things we’re particularly sympathetic to are the restaurants,” Mnuchin told CNBC. “Many of the restaurants are just beginning to open up and have said that they’d really like to hold the money. They can’t do that; that’s not something we can do. But we’ll look at a technical fix.”
‘Unworkable Structure’
In response, a National Restaurant Association spokesperson said, “As currently structured, the PPP creates an unworkable structure for the vast majority of restaurants. As states begin lifting their stay-at-home orders, it will take some weeks—or months—for restaurants to ramp up operations and restock inventory, recruit and retrain staff, comply with new health codes, etc.”
Small-business advocates, lawmakers and small firms themselves have been pushing for federal agencies to issue additional guidance on the program’s forgiveness requirements, and for more leniency in the terms, according to the Journal.
Meanwhile, the Treasury Department has issued a statement saying large companies with access to other sources of capital are unlikely to meet the requirement that program applicants need the loan to support ongoing operations. Treasury has said firms that determine they misunderstood this requirement may return the loan money without penalty up until Thursday.