The $350 billion in funding for the federal government’s small-business relief program has run out, leaving hundreds of thousands of businesses without a lifeline as they try to survive the pandemic.
Replenishment has been held up by disagreement between Democrats and Republicans on structuring the program, which is intended to help small businesses keep employees on their payroll while business has dried up because of the virus.
“The millions of men and women who work at America’s small businesses and their families are battling a health crisis while also facing an economic crisis unless Congress authorizes additional funds for this program,” said Consumer Bankers Association CEO Richard Hunt.
According to the Senate Committee on Small Business and Entrepreneurship, the program was in such high demand that it was burning through more than $3.5 billion every hour that loans were processed in the past few days.
The Small Business Administration’s coronavirus relief program, called the Paycheck Protection Program, was established to help small businesses, through $350 billion in loans, as part of the massive $2.3 trillion CARES Act relief package that President Trump signed last month.
The SBA will forgive the loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
Majority Leader Mitch McConnell tried last week to pass a bill infusing $250 billion more into the program, but Democrats blocked the request. They proposed their own $500 billion measure, which included changes to the program, restructuring it to provide special funding for vulnerable businesses and underserved communities. They also sought to include money for hospitals, state and local governments, and food assistance recipients.
Congressional Republicans say the reason the program hasn’t been funded is because of Democrats’ demand to restructure the small-business relief program by setting aside funds for community-based lenders. Republicans say this is “unworkable” and would bring the relief program to a standstill.
“The initial #PaycheckProtectionProgram funds have run out. 5.2 million more Americans filed for unemployment last week,” Sen. Tim Scott, a South Carolina Republican, tweeted Thursday morning.
“We could pass a 1 page bill today to extend funding, keep more workers employed. Democrats don’t like that idea,” Scott said.
