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Illustration: Aïda Amer/Axios

America's small businesses are breathing much more easily now that the government has announced that anybody borrowing less than $2 million under the PPP will simply be presumed to have needed the money.

By the numbers: The new guidance, as laid out in the answer to question 46 of the official FAQ, applies to 4,198,656 of the 4,232,534 loans issued through May 8. That's more than 99% of all the PPP loans.

The big picture: When the PPP was first launched, to bipartisan acclaim, it raised hopes across the country. Those hopes were dashed when it ran out of its allotted $342 billion quickly, leaving millions of small businesses without any government-backed funds at all.

  • There's nothing worse than raising hopes only to dash them, and the result was a wave of anger and recrimination. Politicians soon turned to vilifying larger companies that had applied for funds.

The PPP's second round freed up another $310 billion for loans. As of yesterday evening, there's more than $117 billion of that money remaining.

The bottom line: When the government moves the goalposts, that's a function of how cash-constrained the PPP program is.

  • Initially, businesses were encouraged to apply for loans, so the money could be put to good use.
  • When it became obvious that there wasn't enough money to go around, politicians became very strict about who should get it.
  • Now that the program's funding exceeds demand, the policy rhetoric has been loosened up significantly.

Why it matters: The PPP did little to help many small businesses, including restaurants, and was designed primarily to funnel cash to employees rather than to support struggling owners. Within its narrow and flawed design parameters, however, it now seems at least to have been adequately funded.

Of note: Axios applied for a PPP loan, received it, and then returned it when the program became politicized. Thanks in large part to the Fed, we found an alternative source of capital in the private markets.

Go deeper: How the push against large PPP loans moved the program's goalposts

Go deeper

Dan Primack, author of Pro Rata
Aug 5, 2020 - Economy & Business

Why the employee retention credit is an overlooked stimulus issue

Illustration: Eniola Odetunde/Axios

D.C. remains deadlocked on the next stimulus package, days after extended unemployment benefits ended and days before PPP is set to expire.

Where it stands: One unresolved issue that hasn't gotten enough attention is a proposed expansion of the employee retention credit, which could have a significant impact for companies that have experienced severe revenue declines.

Dan Primack, author of Pro Rata
1 hour ago - Economy & Business

Trump blocks banks from limiting loans to gun and oil companies

Illustration: Sarah Grillo/Axios

Big banks are no longer allowed to reject business loan applicants because of the industry in which they operate, according to a new rule finalized on Thursday by the Trump administration.

Why it matters: Wall Street has curtailed its exposure to industries like guns, oil and private prisons, driven by both public and shareholder pressures. This new rule could reverse that trend.

Former FDA commissioner: "Reliable drug supply is absolutely critical"

Axios' Caitlin Owens and former FDA commissioner Mark McClellan. Photo courtesy of Axios Events

Having a reliable supply of pharmaceutical drugs throughout America will be "absolutely critical" to boosting affordability in health care during the Biden administration, former Food and Drug Administration (FDA) commissioner Mark McClellan said at a virtual Axios Event on Friday.

The big picture: McClellan, who served under President George W. Bush, says drugs having limited supply and limited competition leads to elevated pricing. He considers drug supply to be a national security and public health issue.