More than 90 percent of the US government’s $ 349 billion small business bailout fund has been exhausted, the Small Business Administration said on Wednesday, fearing the program would be exhausted before Republicans and Democrats reached a deal. agreement to restore it.
The paycheck protection program, which offers small businesses, entrepreneurs and independent traders about 10 weeks of salary spending to keep them afloat during the crisis, had allocated at least $ 315 billion in funding to more than 1.4 million businesses at 6 p.m. Wednesday, the SBA. said.
An SBA spokesperson did not give an estimate of the time it would take before the funds ran out. If approvals continue at their average rate of $ 2.75 billion between 8:30 a.m. and 5 p.m. Wednesday, the remaining funds will disappear in less than 14 hours.
Negotiations on Capitol Hill to increase funding for the program by $ 250 billion continue, after no agreement was reached last week on additional funding for the PfP.
President Donald Trump has sought to blame the Democrats in Congress, who have sought to include funds for hospitals and local governments in any new spending bill.
“Now it has been so good that it is almost exhausted,” said Trump. “We want to fill it and we cannot get the Democrats’ approval. “
Small businesses turned to social media and contacted their local representatives to complain about the difficulty in accessing the program, which was officially launched on April 3 but was delayed at several banks as they struggled with technical and compliance issues.
JPMorgan Chase said on Tuesday that it had already paid $ 9.3 billion to companies that applied through the program, after being approached by 300,000 companies asking for $ 37 billion. Bank of America said on Wednesday that it had received 279,000 applications under the program, totaling $ 43 billion, as of April 8.
Businesses say that money is essential to their survival, as it allows them to keep their employees during business closings or loss of income. Support is structured like a loan, but funds are written off if companies can demonstrate that they used the money for payroll or other authorized expenses.
The State Bankers Association, which represents banks of all sizes across the United States, wrote to congressional leaders Thursday afternoon urging them to “rapidly increase” funding for the PPP.
“In just under two weeks, the PPP has provided an economic lifeline to more than a million small businesses across the country and has enabled these small businesses to remain viable – and to maintain their workforce.” work – during the COVID-19 pandemic, “according to the letter, which was signed by banking associations from Alaska to Idaho and Puerto Rico.
Democrats in the Senate opposed the rapid passage of additional funds. The party responded with its own proposal, which would impose restrictions on the additional $ 250 billion for small businesses, in addition to allocating an additional $ 100 billion to hospitals to purchase personal protective equipment and expand testing capacity. ; An additional $ 150 billion for state and local governments to fight the epidemic while facing falling incomes; and a 15% increase in food stamp benefits for low-income Americans.
“Democrats know that for the paycheck protection program to work, it has to work for everyone,” said Nancy Pelosi, Democratic President of the House of Representatives, on Wednesday afternoon. She said her party has asked the government to help “under-banked and other small businesses struggling to access PPP” as well as “desperate local and local governments” and “hospitals on the front lines of the epidemic “
“As has been clear since last week, [the] The Republicans’ bill, which fails to resolve these critical issues, cannot get unanimous consent from the House, “she said.
A spokesperson for Chuck Schumer, the highest Democrat in the Senate, said that Mr. Schumer had been in regular contact with Secretary of the Treasury Steven Mnuchin, and that Democratic House and Senate staff would meet Wednesday Treasury officials.
Marco Rubio, the Republican chairman of the Senate Small Business Committee, said it was “inexcusable” for the PPP to “stop tonight.” “Millions of small businesses are in limbo because the Democrats have refused to set aside partisan politics and fund this bipartisan program,” said the Florida senator.
In a joint statement Wednesday, Mnuchin and SBA administrator Jovita Carranza insisted that the agency had processed 14 years of loans in less than two weeks and urged Congress to approve additional funds for the PPP.
“The high demand we have seen underscores the need for hard-working Americans to have access to aid as quickly as possible. We want every eligible small business to participate and get the resources it needs, ”they said.
Both the House and the Senate are set back, and the Capitol complex has been largely closed to slow the spread of the coronavirus. However, the Senate maintains a pro forma Thursday and the House will hold a similar session on Friday.
Congressional leaders said on Wednesday that they “hoped” that an agreement could be reached by the end of the week.
The majority Democrat House Leader, Maryland Congressman Steny Hoyer, told reporters on a Wednesday call that if he could not “guarantee” a deal by Friday, reach a deal. here the end of the week would be “optimal”.
James Politi’s additional report in Washington
Commercial update on coronavirus
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