The US government’s $349bn emergency small business lending program has officially tapped out, leaving small business owners waiting in line as Congress scrambles to come up with more funding.
The Small Business Administration (SBA) has run out of money for the Paycheck Protection Program (PPP), according to a message the agency has issued to lenders. Legislative negotiations have yet to produce a way to replenish the money.
U.S. Treasury Secretary Steven Mnuchin and Democrats are in discussion, trying to reach agreement on a package that will immediately increase funding for the program.
House Speaker Nancy Pelosi has said that negotiations continue, reiterating Democratic demands for additional funding for state and local governments and hospitals.
“More than 14 years’ worth of loans processed in less than 14 days”
Following the launch of the unprecedented Paycheck Protection Program, the SBA processed more than 14 years’ worth of loans in less than 14 days.
The data is from a statement issued by U.S. Small Business Administration Administrator Jovita Carranza and U.S. Treasury Secretary Steven Mnuchin.
The statement continues:
“From its start on April 3, PPP provided payroll assistance to more than 1.6 million small businesses in all 50 states and territories. Nearly 5,000 lenders participated in this critical program, including significant lending by community banks and credit unions.
“Nearly 20% of the amount approved was processed by lenders with less than $1bn in assets, and approximately 60% of the loans were approved by banks with $10bn of assets or less.
“No lender accounted for more than 5% of the total dollar amount of the program.“The vast majority of these loans—74% of them—were for under $150,000, demonstrating the accessibility of this program to even the smallest of small businesses.
“The PPP provided funds to a wide variety of industries in all sectors of the economy, including construction, manufacturing, food and hospitality services, health care, agriculture, and retail, among many others”
Waiting for more funding
The program, administered by the Small Business Administration through participating banks, was marred by technical glitches from the start, even as overwhelming demand and confusion about how it would all work slowed down the approval process.
Around the country, would-be borrowers were turned away by banks because there were too many applicants.
More money is expected to come, but when is an open question. Congressional leaders and the Trump administration are discussing adding hundreds of billions of dollars to replenish the program, but have so far failed to reach an agreement.
Meanwhile, banks have stopped accepting applications.
“The world’s largest bait and switch”: