The money well for Paycheck Protection Program (PPP) loans geared to help small businesses combat the coronavirus has run dry.
The U.S. Small Business Administration, which helps run the program, issued a statement around noon today indicating “All PPP funds are exhausted.”
The federal agency stated earlier in the day, “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.”
The SBA reported that as of 8:45 am Thursday there have been nearly 1.64 million applications approved totaling more than $339 billion at more than 4,900 lending institutions.
The funding apparently hit its limit Thursday morning. The $350 billion lending program for firms with up to 500 workers became law in late March as part of the $2 trillion coronavirus economic stimulus package.
Some observers speculated that the funding could evaporate fast after PPP was launched on April 3.
The drained fund leaves some uncertainly as it remains unclear when and if the PPP lending pot will be replenished with new funds. Federal government officials and Capitol Hill leaders have talked about supporting such a supplement but nothing has been finalized.
The U.S. Treasury and SBA are looking for extra funding to offer more loans to small businesses hit by the coronavirus crisis. The PPP offers small businesses forgivable loans to cover workers’ pay, rent, and other operating costs.
On Wednesday, U.S. Treasury Secretary Steven T. Mnuchin and SBA Administrator Jovita Carranza issued the following statement regarding the Paycheck Protection Program and Economic Injury Disaster Loan Program:
“The SBA has processed more than 14 years’ worth of loans in less than 14 days. The Paycheck Protection Program is saving millions of jobs and helping America’s small businesses make it through this challenging time. The EIDL program is also providing much-needed relief to people and businesses.”
“By law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations.”
Further, they said, “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.”
“The high demand we have seen underscores the need for hardworking Americans to have access to relief as soon as possible. We want every eligible small business to participate and get the resources they need.”