The U.S. House is expected to
Mnuchin said this week he expects this would be the last round of funding because there are now other financing opportunities for small businesses, including more money for the disaster loans and the Federal Reserve’s Main Street lending facility.
But small business advocates have estimated that as much as $1 trillion could be needed. They say as large banks are ready
“This next tranche is not going to be enough, obviously,” said
Lawmakers also said more funding would be needed during a House Small Business Committee hearing on the loan program Thursday. “We all know it’s going to need more money again soon,” said Democratic Representative
Applications for the initial PPP funds were being processed at a rate of about $40 billion a day in the final days before funding was exhausted, signaling that the replenishment could tap out quickly.
Some large, publicly traded companies and big chains such as
Still, an NFIB
“It’s a good second push to get money to small business owners, but there’s still a large number of small business owners who are still waiting to access this program,” Wade said.
The Paycheck Protection Program, or PPP, offers loans of as much as $10 million that convert to grants if proceeds are used to keep workers on the payroll and cover rent and other expenses for two months. The SBA guarantees the loans for lenders to disburse, and there’s no comprehensive accounting yet of how much money has reached small firms.
The SBA also stopped accepting applications last week for the Economic Injury Disaster Loan program, or EIDL, that offers low-interest financing and emergency advances of as much as $10,000 that don’t have to be repaid. Congress is adding $50 billion for loans and $10 billion for grants to that program.
More than 1.6 million small businesses were approved for PPP funding before the money ran out, with an average loan of $206,000, according to an SBA report. About 755,500 firms have received EIDL grants and almost 27,000 disaster loans have been approved so far, the SBA
Congress will likely have to replenish the funds if they run out again, said
“I don’t think we’re at the point where we can realistically say, ‘The bridge has stopped and we’re sorry if you fall off the end of it,’” he said.
The next funding round includes a $60 billion carve-out for small lenders, which is designed to help them compete with larger banks that will be more actively issuing loans this time, said
Even though there is money set aside for smaller banks and financial institutions to lend, that won’t fix the problem that companies with existing banking relationships “are still going to get at the front of the line,” said
Arnesmeyer said he thinks Mnuchin “will change his tune” about the need for additional funding in a couple of weeks when the crisis gets worse and the problems faced by small firms deepen.
“The sheer magnitude of businesses that don’t have revenue and are closing and/or laying massive numbers of people is staggering,” he said.
Sinnidra Taylor said she has little hope that her business, the Crazy Waffle Bar in New Orleans will see any of the newly approved funds for the PPP.
“I am excited that they have allotted more money. I am also not confident that I will get any,” Taylor said. “I have the feeling small businesses such as mine are being overlooked and falling through the cracks.”
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