The pending request is designed to support a $ 349 billion small business loan program that was created as part of the $ 2,000 billion coronavirus rescue bill enacted late last month. Banks and the Small Business Administration have been overwhelmed by the candidacies since the program started operating on Friday, driving President Trump, Senator Marco Rubio (R-Fla.) – who is the author of the program – and others to predict the need for more funds.
Senate Majority Leader Mitch McConnell (R-Ky.) Said Tuesday that he would work with Treasury Secretary Steven Mnuchin and Senate Minority Leader Charles E. Schumer (DN.Y.) and “Hopes to approve additional funding for the paycheck protection program unanimously. consent or vote by voice at the next Senate session scheduled for Thursday.
We have days, NOT weeks, to resolve this issue.
We work with @ American treasury make a formal request for additional funds as soon as possible and with the leadership of the Senate to obtain an expedited vote as soon as possible.
– Marco Rubio (@marcorubio) April 7, 2020
The fact that the Treasury requested it on the third day of the program’s existence underscores the growing demand for businesses to obtain financing, as many of them find it difficult to avoid closure. The small business program progressed faster than other elements of the bailout bill – including unemployment insurance and personal payments – but demand still exceeded expectations.
Businesses with fewer than 500 employees are eligible for loans of up to $ 10 million. The loans will be canceled, which means that business owners will not have to repay them if they meet certain conditions, including using 75% of the money to retain or re-hire employees. And businesses can receive a loan advance of $ 10,000 that does not have to be repaid, said SBA.
Bank of America said on Monday that it had received 178,000 business applications for $ 32.9 billion in loans as companies demanded the $ 349 billion small business administration program.
Wells Fargo did not begin receiving requests until Saturday and Monday morning said it had reached the $ 10 billion ceiling for loans under the program. To cope with the overwhelming demand, the Federal Reserve has launched a system that allows banks to discharge these assets so that they can issue more loans.
Democrats and Republicans have said in recent days that the $ 349 billion program is likely to be expanded, but Democrats have also called for other extensions, such as more unemployment insurance benefits for laid-off workers. Schumer and other Democratic senators announced pressure for a risk premium equivalent to $ 25,000 a year for workers who were forced to stay at work during the pandemic on Tuesday, and may try to use GOP demand for small business financing as leverage to include it in the next bailout bill.
“All I’m going to say is that it’s one of our top priorities” for the next bill, Schumer told reporters, referring to the risk premium.
Parliamentary minority leader Kevin McCarthy (R-Calif.) Tweeted Tuesday that “the demand for the paycheck protection program is overwhelming.”
He wrote that he spoke to Mnuchin on Tuesday morning and “supported his demand for more money for US small businesses. After Senate approval, the House should act quickly to do the same. “
Other Republicans have also called for urgent action.
The demand for the payroll protection program of which I am a co-sponsor, which provides repayable loans so that small businesses can survive and send paychecks to their employees, is so strong that I urged the White House and my colleagues to prepare to increase funding.
– Senator Susan Collins (@SenatorCollins) April 7, 2020
The program is supposed to encourage small businesses to stop laying off workers after 10 million workers applied for unemployment at the end of last month. The unemployment rate is expected to significantly exceed 10% this spring and may remain there next year. White House officials have said they want to help adopt policies that will lead to a sharp economic rebound this year, but economists have predicted that this is unlikely to happen.
– Renae Merle and Mike DeBonis contributed to this article.