The $349 billion earmarked to help small businesses stay afloat during the coronavirus crisis ran out of money Thursday, less than two weeks after applications for the program opened.
The Paycheck Protection Program is part of the $2 trillion stimulus package Congress passed last month. It provides forgivable loans to companies that meet size and other requirements. The loans convert to grants if businesses retain the majority of their staff and use the funds for essential expenses, like rent and utilities.
Banks administering the program began accepting applications last week but many companies reported delays, bureaucratic hurdles, and other issues that made it difficult to apply. In Seattle and other tech hubs across the country, the PPP sparked an ethical debate over whether investor-backed startups should apply when so many companies with fewer resources are struggling.
The federal Small Business Administration began notifying successful businesses that their applications had been accepted this week and some loans have been funded. On Thursday, the Small Business Administration put a notice on its website that the program is now closed.
“The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding,” the website says. “Similarly, we are unable to enroll new PPP lenders at this time.”
The $349 billion relief package meant to save struggling small business from oblivion has run out of money. Let's count the ways it was a catastrophic failure:
1. It served only 1.4M small business owners. In other words, 95.4% of small biz got $0https://t.co/6uZUu0vACf
— Dan Price (@DanPriceSeattle) April 16, 2020
Congressional lawmakers are working to unlock additional funds for the program but Democrats and Republicans have struggled to reach a compromise. Democrats are pushing for the next round of funding to help underbanked businesses and others struggling to access the program. Republicans tried to pass additional funding last week.
The Paycheck Protection Program approved 1.4 million loans as of Wednesday evening, according to The New York Times. Treasury Secretary Steve Mnuchin is expected to continue negotiating with lawmakers about adding another $250 billion to the fund this week.
