Paycheck program may be extended; $130B left

After a stumbling start, the government’s centerpiece relief program for small businesses was closing down Tuesday — although it may turn out to be a temporary hiatus.

In just three months, the Paycheck Protection Program handed out $520 billion in loans meant to preserve workers’ jobs during the coronavirus pandemic. But as new outbreaks spike across the country and force many states to rethink their plans to reopen businesses, the program had more than $130 billion still in its coffers.

It might not be gone for long, though. Late Tuesday, just a few hours before the program was scheduled to shut down, the Senate approved a five-week extension. It wasn’t clear when the House might take up the bill.

John Lettieri, the chief executive of the Economic Innovation Group, a think tank focused on entrepreneurship, praised the program, calling the aid it provided to small businesses “a major achievement.” But there was still work to be done, he said.

“We’re still in a public health crisis, and we’re facing a long, slow, uneven return,” he said. “Millions of businesses still have their survival at risk.”

The hastily constructed and frequently chaotic aid program, run by the Small Business Administration but carried out through banks, handed out money to nearly 5 million businesses nationwide, giving them low-interest loans to cover roughly 2½ months of their typical payroll costs. Those that use most of the money to pay employees can have their debt forgiven.

The cash went to a wide variety of companies: manufacturing firms with hundreds of workers, Main Street retailers with a few dozen employees, and freelancers working for themselves. The loans ranged from a few hundred dollars to $10 million and allowed businesses to keep paying employees — even if they had nothing to do but sit at home.

The program appears to have helped prevent the nation’s staggering job losses from growing even worse. Hiring rebounded more than expected in May as companies in some of the hardest-hit industries, especially restaurants, restored millions of jobs by recalling laid-off workers and hiring new ones.

That is how it played out for Dr. Chris Stansbury, an optometrist who co-founded West Virginia Eye Consultants, which has seven offices around the southern part of the state. He furloughed 40 employees in late March after a statewide stay-at-home order, when his once-thriving practice was limited to emergency appointments only. For weeks, its sales were negligible.

The loan he received through the program April 16 gave him a financial safety net as he began to reopen — with a host of new health precautions — in early May. Sales are back to around 90 percent of normal, and Stansbury said he was cautiously optimistic that the worst had passed for his business. Nearly all of his workers are back on the job.

“If we hadn’t had this money to get us through, things would have been pretty dire,” he said. “I don’t think we would have been able to reopen all of our locations right away.”

Other businesses did not have such a smooth experience. The program was marred by technical problems.