Funds for the $349 billion Paycheck Protection Program, or PPP, to keep workers on payrolls have been exhausted, the SBA said on Thursday. And money also has lapsed for the Economic Injury Disaster Loan program, or EIDL, offering government loans and emergency grants of as much as $10,000.
“These two loan programs are essential, and neither one is operational now,” said Holly Wade, director of research and policy analysis for the
Congress is debating adding an additional $250 billion to PPP, and small business advocates are calling on lawmakers to add more money for the disaster loan program as well. About 100 members of Congress signed a letter Thursday to SBA Administrator
Without more money for the PPP program, many small firms that have flooded banks with applications won’t get help because the government-backed loans were available on a first-come, first-served basis, and after just two weeks there’s no money left for the SBA to guarantee additional loans, officials said.
“America’s small businesses are on the brink, trying desperately to keep their doors open and support their employees,” Close said in a statement. “They have been let down by lawmakers and the bureaucracy, with the smallest businesses most disadvantaged in attempting to participate in the Paycheck Protection Program.”
Small businesses are continuing to seek loans and existing applications are still pending SBA approval, and Congress needs to act,
“The millions of men and women who work at America’s small businesses and their families are battling a health crisis while also facing an economic crisis unless Congress authorizes additional funds for this program,” Hunt said in a statement.
Because banks make the PPP loans, not the SBA, the fund isn’t technically “out of money” but rather the agency has guaranteed $339 billion to be disbursed,
The SBA said on its website that while it unable to accept new applications for the EIDL loans and emergency grants without more funding, firms that had already submitted their applications will continue to be processed on a first-come, first-served basis.
But small business owners have complained about waiting weeks for answers and funding, and some are getting less than they expected because of the demand. The NFIB said a survey of its members released April 9 found only 4% had been approved and no business owner had received a loan or grant. The SBA has not disclosed how many applications have been approved and funded.
As of Thursday morning, the SBA reported there had been more than 1.6 million applications for PPP loans approved for about $339 billion. That amount is the value of loans approved for lenders to disburse, not money that has reached borrowers. Comprehensive data on how much money has actually been handed out isn’t available, but lenders report that disbursements are being made. The program launched April 3.
Loan approvals had to stop short of the $349 billion total funded by Congress because about $10 billion is needed to cover fees and processing, Republican Senator
U.S. Treasury Secretary
The PPP, which was enacted last month as part of a $2.2 trillion relief package in response to the outbreak, 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.
The initiative got off to
Of the more than 1 million applications that SBA had processed as of Monday, construction firms had a
“Oh my god,” said Alex Steed, co-owner of Knack Factory, a video production firm in Portland, Maine, that’s awaiting funding for a loan. “This is playing out just about exactly how I expected it to. It never felt like this was for small business owners anyway, or manufactured with our needs in mind.”
(A previous version of the story corrected the 20th paragraph to say billions.)
--With assistance from
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