A $349 billion federal relief program for U.S. small businesses is expected to run out of money this afternoon, with many still waiting to get a lifeline, according to officials familiar with the situation.
The government-guaranteed loans are available on a first-come first-served basis. But without more funding, many small businesses that have flooded banks with applications won’t get help, advocates said.
As of mid-afternoon on Wednesday, the
The program, which launched April 3, is running out of money after just 13 days.
An SBA spokeswoman didn’t immediately respond to a request for comment. The Wall Street Journal reported earlier the program is set to run out of funds later Wednesday.
“Senate Democrats played a game of chicken with essential small business relief and now small business owners and their employees will suffer because of their inaction,” spokesman Jesse Hunt said in a statement.
“Democrats know that in order for the Paycheck Protection Program to succeed, it must work for everyone,” Pelosi said in a statement. “That is why we have been asking for the Administration to work with us to help.”
The program, which was enacted last month as part of a $2.2 trillion relief package in response to the coronavirus pandemic, offers loans of as much as $10 million. The loans convert to grants if proceeds are used to keep workers on the payroll and cover rent and other approved expenses for about two months, a short-term stopgap designed to help businesses get by until the economy reopens.
Trump administration officials had said that small businesses would get funding quickly, even the same day they applied, when the program
Data on how much money has actually been handed out to borrowers isn’t available, and some lenders report that disbursements are only slowly being made.
“Sadly it appears #PPP will grind to a halt tonight as the limit on $ allocated to guarantee #PPPloans about to be hit. Now 700000 small business applications are in limbo & no new loans will be made until the game of chicken in Congress ends & additional $ approved,” he tweeted Wednesday.
Small business advocates are concerned that money also could run out for a separate SBA relief program, the Economic Injury Disaster Loan initiative, which is offering loans and advances of as much as $10,000 as grants.
A lag in processing more loans now would be especially hard for small businesses struggling to survive the devastating impact of the pandemic, said
“The worst thing you could do is have desperate small businesses that have a loan application pending to tell them that, ‘Well, we’re going wait to decide what we want to do on additional funding,”’ Merski said.
Erik Bruun, owner of the SoCo Creamery, an ice cream shop and wholesale supplier in Great Barrington, Massachusetts, was one of the first to apply to the paycheck protection program at the end of March. He was told Monday his application had been approved, but he has yet to receive any funds.
“The idea that they’re going to run out of money is of course on my mind, because that just means another delay,” Bruun said. “It gets to the sense of hopelessness you feel when you don’t have certainty.”
(Updates with additional details from eighth paragraph.)
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