The initial $349 billion pool for emergency loans for small businesses derailed by the coronavirus pandemic has run dry as Republicans and Democrats squabble over how to replenish the relief program.
The Treasury Department and Small Business Administration (SBA) have tapped the entirety of funding allotted for the Paycheck Protection Program (PPP), which offers forgivable loans to small businesses intended to keep workers on the payroll and small firms from going under.
“The SBA is 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,” the SBA said in a statement Thursday morning.
The SBA also said that the $10 billion Congress appropriated for Economic Injury Disaster Loans had dried up. The program was meant to get fast cash to businesses, providing them with a $10,000 advance within just a few days of application for loans of up to $2 million.
Created through the $2.2 trillion economic relief bill enacted by President Trump last month, the PPP unleashed a wave of demand for emergency loans across the U.S., overwhelming banks, credit unions and SBA technology.
Trump, Treasury Secretary Steven Mnuchin and lawmakers from both parties pledged to pour more money into the program as its initial funding quickly ran down, but leaders have been locked in a two-week showdown over potential stipulations for the next tranche of loans.Mnuchin and SBA Administrator Jovita Carranza warned shortly ahead of the lapse that unless Congress authorizes more funding, banks will not be able to sign off on any additional loans under the program. “We urge Congress to appropriate additional funds for the Paycheck Protection Program (PPP) … at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks,” they said.
Republicans want to limit an “interim” bill to an extra $250 billion for the small business program, which provides loans and grants to companies with fewer than 500 people.