A U.S. coronavirus loan program for small businesses closed with almost $134 billion in remaining funds and with plans for a new round of aid on hold.
The Small Business Administration, which runs the Paycheck Protection Program with the Treasury Department, stopped accepting new loan applications at 11:59 p.m. on Saturday. More than 5.2 million loans totaling $525 billion have been approved since the program launched April 3, according to a report posted by the SBA on Wednesday. The average loan amount was $101,000.
The $134 billion in remaining funds returns to the Treasury unless Congress votes to re-appropriate the money -- but negotiations have stalled among Democratic lawmakers and the Trump administration on a broader stimulus package. Aproposal from Senate Republicans calls for using $190 billion in leftover PPP money and new funding to extend the current program through Dec. 31 while allowing smaller and disadvantaged companies hardest hit by the pandemic to get a second loan.
Senate Democrats have introduced a similar proposal that differs on some details; for example, it would restrict eligibility to companies that have 100 or fewer employees rather than 300 or fewer in the Republican plan. Democrats have also called for more funding for SBA’s separate Economic Injury Disaster Loan program, while Republicans have suggested offering new long-term, low-interest loans.
A group of U.S. corporate leaders led by Starbucks Corp.’s former head, Howard Schultz, have pressed lawmakers for additional, longer-term support for small businesses, including federally guaranteed loans that could be turned into grants, at least partially, for those hardest-hit by the pandemic.
Lawmakers and administration officials have said there’s bipartisan agreement on the need for additional targeted aid for small businesses, and that the parties could quickly resolve any differences on such aid if there’s an agreement on a broader stimulus package.
Treasury Secretary Steven Mnuchin said on CNBC on Monday that if legislation similar to what’s been proposed for a second round of PPP were put up for a vote, “I’m highly confident we’d have an overwhelming number of people on both sides of the aisle pass that.”
The $134 billion in remaining PPP funding is almost $5.8 billion higher than what SBA reported a week earlier and reflects loan approvals net of cancellations, as well as adjustments for “loan increases, decreases and reinstatements.”
The agency last month released specific loan-level data for loans approved through June 30 -- but the information was riddled with errors, including suspect numbers of reported jobs retained and incorrect loan amounts, loans located in the wrong congressional district and duplicate loans.
The SBA has said the publicly released data is based on information submitted by lenders. The agency is encouraging lenders and borrowers to report any errors but hasn’t provided details or said whether corrected data will be released.
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