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New PPP Loans Should Include Revenue Test, Mnuchin Says

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The Paycheck Protection Program should be extended, Treasury Secretary Steven Mnuchin told lawmakers Friday, and new loans should go to businesses facing “significant revenue declines.”

Treasury and the Small Business Administration will also consider forgiveness for small loans, he said.

As it stands now, the PPP still contains $130 billion in available funds.

Mnuchin said that the Trump “administration supports using the existing money [in the program] and topping it up with some additional money; that will be discussed in allowing for a second payment for the businesses that are especially hard hit.”

Said Munchin: “I think this time we need to have a revenue test and make sure that money is going to business that have significant revenue declines — that’s something that Congress didn’t have in the first provision.”

The more targeted PPP relief ”for smaller companies and those that have been especially hard hit by the pandemic” would include restaurants, hotels and other travel and hospitality businesses, Mnuchin said.

“What about minority businesses?” Rep. Nydia Velazquez, D-N.Y., chairwoman of the committee asked Mnuchin.

“I agree with you, there should be a set-aside for small minority businesses,” Mnuchin replied.

Also on Friday, the Federal Reserve Board modified the Main Street Lending Program to provide greater access to credit for nonprofit organizations such as educational institutions, hospitals and social service organizations.

The Fed approved two new loan options to provide support to a broad set of nonprofit organizations that were in sound financial condition prior to the pandemic.

“Nonprofits provide vital services across the country and employ millions of Americans,” said Federal Reserve Chair Jerome Powell, in a statement. “We have listened carefully and adapted our approach so that we can best support them in carrying out their vital mission during this extraordinary time.”

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