'Paycheck Protection Program' Runs Out of Funds for Small Businesses - Should Congress Pass More Funding?
Should Congress increase funding for the forgivable Paycheck Protection Program's small business loans?
What’s the story?
- The Small Business Administration’s Paycheck Protection Program (PPP) has exhausted the last of the $349 billion in funding it was provided under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to make forgivable loans to small businesses.
- The PPP hit its lending limit Thursday morning after approving more than 1.6 million small business loans valued at $339 billion. The remaining $10 billion is allocated for covering loan fees on approved small business loans.
- Until Congress passes a bill to increase funding for PPP loans, the Small Business Administration is unable to accept new loan applications or admit new lenders into the program. Congress could theoretically approve more funding before the end of the week, but in the meantime visitors to the SBA’s PPP website are seeing this notice:
What’s happening in Congress?
- The Senate convenes for a pro forma session Thursday at 3pm Eastern, and there could be a unanimous consent request to pass additional PPP funding. If it succeeds, the House has a pro forma session Friday at 11am Eastern where the bill could pass by unanimous consent or voice vote and make its way to President Donald Trump’s desk for enactment. However, a previous effort to pass more PPP funding by unanimous consent failed.
- A week ago, Senate Republicans tried to pass a “clean” bill by unanimous consent that would’ve simply boosted PPP funding by $250 billion. Senate Democrats objected and blocked the clean bill, then offered a $500 billion bill that would’ve provided $125 billion for the PPP, $125 billion for a new small business loan program, $100 billion for healthcare providers, and $150 billion for state & local governments. The Democratic bill was then blocked by a Republican objection.
- Democrats’ request would effectively double the funds provided under the CARES Act for both healthcare providers and state & local governments while the initial funds are still going out. The first $30 billion in funding for healthcare providers of the $100 billion allocated by the CARES Act was disbursed on April 10th; and $71 billion of the $150 billion in funds for state & local governments are available for distribution as of April 14th, while the remainder will go out before April 24th.
- It’s unclear whether Democratic leadership is willing to allow PPP funding to pass by unanimous consent now that the funding has run dry. House Speaker Nancy Pelosi (D-CA) on April 9th called the attempt to pass more PPP funding in a clean bill a “stunt on the floor” and said there was “no data as to why we need it” while calling for negotiations. On April 15th, Pelosi said the clean PPP funding extension “cannot get unanimous consent in the House.”
- At least one rank-and-file Democratic senator has said PPP funding should be approved by unanimous consent since before last week’s unsuccessful attempt:
To learn more about the Paycheck Protection Program and how small businesses can apply, click here.
To learn more about the Paycheck Protection Program and how self-employed individuals can apply, click here.
— Eric Revell
(Photo Credit: iStock.com / Kanawa_Studio)
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