- A critical government relief program for small businesses is already out of money just two weeks after it was rolled out.
- The $US350 billion Paycheck Protection Program had faced overwhelming demand since its introduction on April 3.
- Democrats and Republicans are sparring over further funding of the program.
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The $US350 billion Paycheck Protection Program aimed at providing government-financed loans for struggling small businesses has been depleted of funds after just two weeks of operation.
Business owners filing a loan application were met with a message from the Small Business Administration, which is managing the program under the $US2.2 trillion economic relief law President Trump approved late last month.
“The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding,” the SBA said. “Similarly, we are unable to enroll new PPP lenders at this time.”
Since the program is maxed out, small business owners can no longer file to get a loan to tide them over during the crisis.
The PPP had formed a centrepiece of the federal government’s economic relief efforts in the midst of the pandemic that has inflicted severe economic pain. The crisis has led to unemployment levels unseen since the Great Depression.
Under the program, government-financed bank loans were made available for small businesses that employed fewer than 500 workers – and they would be forgiven if owners use most of the money to cover employee payrolls.
Since its rocky launch on April 3, it had overwhelmed by demand by business owners seeking immediate relief Both Republicans and Democrats say further funding is needed to replenish the program, but they disagree on how to do it.
Democrats are seeking to add conditions to future federal lending, such as directing some of the loans towards minority-owned businesses.
The federal government, however, still hasn’t released data showing how much of the money has reached small businesses,The Washington Post reported.
The SBA reported on Thursday morning that it had processed over 1.6 million loan applications totaling $US339 billion.