Illustration: Aïda Amer/Axios

Federal regulators still haven't provided the required guidance on Paycheck Protection Program loan forgiveness, a scant 18 days past deadline, but it's become less important for the vast majority of small business recipients.

Driving the news: The key buzzword this week was "safe harbor."

  • The Small Business Administration said it would provide safe harbor to all PPP borrowers of less than $2 million, in terms of deeming their certifications to have been made in good faith.
  • In other words, no more need to sweat over whether or not their applications met the "necessity" criteria.

It also extended the "safe harbor" for no-questions-asked loan returns to May 18. This is basically for borrowers of above $2 million, or smaller borrowers who have concerns about their applications other than the aforementioned "necessity" criteria.

  • An SBA spokesperson tells Axios that companies that returned PPP loans are allowed to reapply, so long as they no longer have an active E-Tran loan number.

But back to that lack of forgiveness guidance: It's still a real problem. Not just for larger borrowers, but even for smaller ones that have larger operational expenses than employee expenses.

  • A recent Inspector General report noted that "tens of thousands of borrowers" won't meet the SBA requirement that 75% of PPP loans be used on payroll.
  • Some suggest that this could be why so many small businesses, upwards of 25%, never even bothered applying for PPP.
  • There's speculation that the 75% floor could be lowered in forgiveness guidance, given that it doesn't appear in the actual CARES Act. But at this point it's hard to really know. As one banker said to me: "If you don't like the PPP rules today, don't worry about it because they'll change again tomorrow."

The bottom line: Flexibility for PPP borrowers has increased, particularly as social media attention and political criticism has waned.

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Dion Rabouin, author of Markets
Aug 7, 2020 - Economy & Business

Household debt and credit delinquencies dropped during Q2

Reproduced from New York Fed Consumer Credit Panel; Chart: Axios Visuals

Americans cut back on credit cards and increased savings during the worst three-month economic period in U.S. history, as household debt fell for the first time in six years, data from the New York Fed showed.

By the numbers: Total debt declined 0.2% to $14.27 trillion in the second quarter, led by a $76 billion drop in outstanding credit-card balances.

Dan Primack, author of Pro Rata
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Leon Black says he "made a terrible mistake" doing business with Jeffrey Epstein

Photo illustration: Sarah Grillo/Axios. Photo: Rick Friedman/Corbis/Getty Images

Apollo Global Management CEO Leon Black on Wednesday said during an earnings call that he made a "terrible mistake" by employing Jeffrey Epstein to work on personal financial and philanthropic services.

Why it matters: Apollo is one of the world's largest private equity firms, and already has lost at least one major client over Black's involvement with Epstein.

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Jeremy Corbyn suspended by U.K. Labour Party over anti-Semitism report

Photo: Christopher Furlong/Getty Images

The U.K. Labour Party has suspended its former leader, Jeremy Corbyn, after a watchdog report found that the party failed to properly take action against allegations of anti-Semitism during his time in charge.

Why it matters: It represents a strong break by Keir Starmer, Labour's current leader, from the Corbyn era and one of the party's most persistent scandals.