Small Business Loan Program Runs Out of Money
WASHINGTON, D.C.—April 17, 2020—The Paycheck Protection Program (PPP), an initiative of the $2 trillion coronavirus stimulus, has run out of money as congressional lawmakers have been unable to reach an agreement about how to replenish the fund. The program was initially created with $349 billion to fund forgivable loans intended to help businesses with fewer than 500 employees keep their workers on the payroll during the pandemic, according to The Hill.
As of Wednesday evening, 1.4 million loans had been approved, but the Small Business Administration (SBA) released a statement Thursday saying they are “currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time.” Additionally, The Hill reports that the $10 billion Congress earmarked to the SBA for economic Injury Disaster Loans has also dried up.
The PPP was a central initiative of the stimulus package, but with funds running out in just three weeks, many businesses are still facing dire economic circumstances with no access to relief funding. Lawmakers promised to put more money into the PPP as banks and credit unions became overwhelmed with loan applications; however, Republicans and Democrats have been at an impasse over how to replenish the fund.
According to The New York Times, Republicans want to simply replenish the small business fund, while Democrats want to add money to help hospitals, food stamp recipients, and state and local governments. Additionally, Democrats say changes should be made to ensure the loan money gets to companies that have traditionally been disadvantaged when it comes to securing business loans, such as minority-owned businesses. These negotiations are ongoing.