The House is expected to vote to extend the application deadline for the Payroll Protection Program, as well.

Just hours before the Paycheck Protection Program application deadline was set to expire, the Senate late Tuesday voted by unanimous consent to extend the deadline an additional five weeks to Aug. 8. If the U.S. House of Representatives approves the extension as expected, it could help small business owners tap into the remaining $130 billion in PPP funds available to help maintain payrolls and staff headcount.

Considered a lifeline for small businesses, the PPP has morphed multiple times since its inception as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Congress has already relaxed eligibility rules and requirements for loan forgiveness. More than $510 billion has been distributed to date.

Although businesses claimed the initial $349 billion in PPP funds in less than two weeks, the second $310 billion round of funding has been met with less demand as concerns about eligibility and forgiveness deterred some from applying. Subsequent program clarifications and a recent easing of the loan forgiveness restrictions through the Paycheck Protection Flexibility Act were intended to allay concerns that business owners who held off on applying may have.

Under the current rules, a small business owner can use 60% of their PPP funds on payroll— and they have up to 24 weeks to do so until Dec. 31. But even with the increased ability to qualify for loan forgiveness, there remains reluctance among some business owners to apply, even though the need for economic relief persists.

Roughly $12 billion in PPP loans were returned by the start of June, by both public companies who were met with criticism that they should turn to other sources and by small businesses who were concerned they wouldn’t qualify for loan forgiveness and didn’t want to be held liable to pay the funds back.

Lawmakers Debate Next Steps as Businesses Continue to Struggle

A hesitation to apply however doesn’t mean small businesses don’t need help. According to a U.S. Census Bureau survey conducted between June 14 and June 20, nearly 83% of those surveyed said COVID-19 caused a moderate to large negative impact on their business.

“The resources are there, the need is there, we just need to change the date,” said Sen. Ben Cardin of Maryland, the top Democrat on the Small Business Committee who asked for the Senate’s unanimous approval on the extension bill.

Talks have stalled when it comes to the next round of negotiations over future small business aid. While lawmakers generally agree more aid is needed, it’s unclear what form that will take.

It’s possible that whatever funds remain untapped in the PPP pool after the application deadline will be reallocated to certain areas of business most affected by the pandemic-related economic fallout.

“There appears to be bipartisan support in the Senate to repurpose the $130 billion for PPP, extending it to businesses that are most hard hit . . .  [including] restaurants and hotels and others, where it is critical to get people back to work,” Treasury Secretary Steven Mnuchin said Tuesday during testimony before the House Financial Services Committee.

Robin Saks Frankel

Robin Saks Frankel is a credit cards and personal finance writer for Forbes Advisor. Previously, she covered credit cards and related content at other national web publications including NerdWallet, Bankrate and HerMoney. She’s been featured as a personal finance expert in outlets including CNBC, Business Insider, CBS Marketplace, and has appeared on or contributed to Fox News, CBS Radio, ABC Radio, NPR, International Business Times and NBC, ABC and CBS TV affiliates nationwide. Follow her on Twitter at @robinsaks.

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