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Senate passes extension of Paycheck Protection Program

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The Capitol building stands in Washington, D.C., U.S., on Monday, May 17, 2010. Elena Kagan, U.S. solicitor general and Supreme Court nominee, continues to make the rounds on Capitol Hill, meeting with the senators who will decide whether she becomes the 112th Supreme Court justice. Photographer: Andrew Harrer/Bloomberg
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The Senate has passed an extension of the popular Paycheck Protection Program for small businesses, which was set to close down Tuesday night with $130 billion in funding left over.

The extension to Aug. 8 was offered by Sen. Ben Cardin, D-Md., and cleared the chamber by unanimous consent. The House has yet to take up the bill but could pass it as soon as Tuesday night.

The Small Business Administration, which runs the program with the Treasury Department, is set to stop accepting new applications at 11:59 p.m. Eastern Time on Tuesday. The $659 billion program had approved more than 4.8 million loans totaling $520.6 billion as of Tuesday night, the SBA said. There was $134.5 billion remaining as of Saturday that will be returned to Treasury unless Congress repurposes it.

Cardin said that the June 30 deadline was a "reasonable assumption" when the program was established in March. "We thought by the end of June that our economy would be back on track and we would not need to have additional applications after that date."

PPP loan money used for payroll in accordance with guidelines do not have to be repaid.

Sen. Rick Scott, R-Fla., attempted to amend the extension to limit future loans to the most needy businesses, but dropped that attempt in the face of objections from Cardin, who said the PPP could be modified in the next round of stimulus.

Sen. Susan Collins, R-Maine, said the program would likely be modified next month to require businesses to show revenue losses to qualify for future loans.

The Senate is about to leave on a two-week recess Thursday amid a worsening economic outlook because of a resurgence of the coronavirus. Senate Majority Leader Mitch McConnell said earlier Tuesday that the Senate would take up and debate another virus relief package in late July.

Bloomberg News