Small business loan program runs out of money and no longer accepts applications
Get all the latest coronavirus news and more delivered to your inbox daily. register here.
Popular small business the relief program failed funds Thursday morning, as billions of dollars in additional coronavirus aid remain stuck in congressional limbo.
The Small Business Administration said on its website that the agency is “currently unable to accept new applications for the Paycheck Protection Program based on available credits. Likewise, we are unable to accept any new applications for the Paycheck Protection Program. ‘register new PPP lenders for now. “
Even if Republicans and Democrats agree they need to replenish the program, a $ 349 billion fund approved last month under the CARES Act, they have been left at a deadlock on how to do it.
Last week, Treasury Secretary Steven Mnuchin asked Congress to allocate an additional $ 250 billion to the program. But a GOP attempt to approve it was rejected by Senate Democrats, who argued that additional cash should include emergency funding for hospitals and states, as well as some changes to the small-scale assistance program. companies. Republican aides said the Conservatives would reject any spending beyond the P3.
“The president and his administration will continue to prioritize aid to all those affected by this unprecedented crisis, which is why Democrats in Congress must stop playing politics and blocking aid from additional emergency for our nation’s small businesses, ”White House spokesman Judd Deere said.
Lawmakers in both chambers are working from their home states in the wake of the outbreak and are unlikely to return to Washington, DC until at least early May.
The program, which was launched less than two weeks ago, offers loans at extremely low interest rates to companies with fewer than 500 employees as an incentive to keep staff on the payroll or rehire workers. already made redundant. If at least 75 percent of the money is used to keep employees on the payroll, the federal government will cancel the loans.
There were 1,611,397 loans approved which depleted the $ 349 billion fund. Nearly 5,000 lenders participated, according to SBA data.
The stimulus bill passed at the end of March amounted to $ 2.2 trillion, the largest in recent memory.
Evaporation of program funds comes at a critical time: New figures released by the Labor Department on Thursday revealed that in the four-week period through April 11, 22 million Americans have applied for benefits of unemployment for the first time, an astonishing sign of the colossal. the economic damage inflicted by the virus epidemic. Before the pandemic, the highest number of Americans to seek unemployment help in four weeks was 2.7 million in the fall of 1982.
Time is of the essence for owners. Almost one in four small businesses has closed temporarily in response to the crisis, while 40% plan to do so within two weeks, according to a survey released by the MetLife & US Chamber of Commerce Small Business Index.
If homeowners don’t receive additional support, about 43% have warned they have less than six months for a final shutdown. According to the survey, one in 10 say they have less than a month left before a permanent stop is inevitable.