The $349 Billion Small Business Loan Program Is Now Out Of Money
by Tyler Durden
ZeroHedge.com
Thu, 04/16/2020
We warned yesterday that it was imminent, and now it has occurred…
The Trump administration’s Paycheck Protection Program (PPP) for small businesses slammed by coronavirus has run out of funds, hitting the $349 billion initial allotment Thursday morning, according to the Small Business Administration (SBA).
The SBA says more than 1.62 million applications were approved, totaling $349 billion in loans from more than 4,900 lending institutions.
According to the Small Business Administration:
“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.”
“Applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.”
In a joint statement on Wednesday evening, Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza said:
“The SBA has processed more than 14 years’ worth of loans in less than 14 days…
We urge Congress to appropriate additional funds for the Paycheck Protection Program—a critical and overwhelmingly bipartisan program – at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks.”
While both Democrats and Republicans want to add $250 billion to the small-business aid program, the two parties have been sparring for days over whether to add restrictions to the funds. As reported previously, Democrats want to expand access to the loans as well as include more money for hospitals, food assistance and state and local governments. Republicans, on the other hand, said they want to keep the bill focused on increasing small-business aid and defer other funding debates until the next, broader legislation is crafted.
And so the political buck-passing continues: top Senate Democrate Chuck Schumer told reporters he had spoken with Treasury Secretary Steven Mnuchin Wednesday morning and that both House and Senate Democratic staff were expected to meet with officials from Mr. Mnuchin’s office later in the day.
“We see no reason why we can’t come to an agreement,” Mr. Schumer said.
“We Democrats believe we need more money for small businesses, but we need it to go to the people who are under banked and underserved.”
As the WSJ added, the discussions were the first signs of progress this week, but it remains uncertain whether congressional leaders and President Trump will be able to reach an agreement by week’s end. Both chambers are scheduled to hold brief sessions later this week.
Get back to work Mr. Schumer.
As RSM’s Chief Economist Joe Brusuelas notes, “After only 13 days the PPP is now officially oversubscribed. My sense is that there is greater than $1 trillion in demand following discussions with our SME client base. Congress & the administration cannot act fast enough. “
