Following a Monday meeting with restaurant industry executives, President Donald Trump and Treasury Secretary Steven Mnuchin announced that they will look to ease some restrictions on emergency small business loans related to the coronavirus crisis. Small business owners have argued that time-sensitive restrictions on the loans are overly-stringent, considering coronavirus-related shutdowns have lasted far longer than first predicted.
The Original Loan Structure
The Paycheck Protection Program (PPP) was put into place to ensure that small companies could continue paying employees. The goal was to minimize layoffs, and also to give enough money to workers that they wouldn’t stop spending, which would further cripple the economy.
But the PPP loans came with a number of restrictions. For one, companies were given an eight-week window to spend the money in order to qualify for loan forgiveness. Additionally, small business owners were required to spend 25% of their loan on overhead costs.
Pushback From Restaurant Industry
The restaurant industry has unified to demand permission to keep loan money for a period of 24 weeks, since businesses will likely remain closed for much longer than previously predicted. Even as several states have eased lockdown restrictions for most citizens, major cities have extended lockdown-orders, keeping restaurant doors closed indefinitely.
Willingness to Compromise
Mnuchin has expressed his willingness to adjust the loan program by considering an extension of the forgiveness threshold. “If Congress wants to change that rule,” he commented, “I’m happy to work with Congress if there’s bipartisan support to do that.”
Mnuchin said of the eight-week rule, “Many of the restaurants are just beginning to open up and have said that, you know, 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.”
Meanwhile, Trump took kindly to the restaurant industry’s united request to extend the forgiveness window, responding, “we’ll look at that very strongly.”
“That should be easy,” the President said. “That’s like one of the easiest requests I’ve ever heard.”