On Thursday, the $ 349 billion small business program ran out of funds almost two weeks after the application process opened, according to the Small Business Administration website.
The funds were part of the stimulus package’s paycheck protection program, which provides forgivable credit to help businesses pay employees, rent and utilities for eight weeks. The SBA website states that those who have already submitted applications will continue to be processed on a first-come, first-served basis.
In a joint statement on Wednesday, Treasury Secretary Steve Mnuchin and SBA Administrator Jovita Carranza said the SBA processed loans worth more than 14 years in less than two weeks.
“We are calling on Congress to allocate additional funding to the Paycheck Protection Program – a critical and largely bipartisan program – which will allow us to resume processing loan applications, issue credit numbers and protect millions more paychecks,” Mnuchin and Carranza said in a statement. “The high demand we’ve seen underscores the need for hardworking Americans to have access to relief supplies as quickly as possible. We want every eligible small business to participate and get the resources it needs. “
Before the funds ran out, the Trump administration asked Congress to approve an additional $ 250 billion. In response, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer unveiled a $ 500 billion plan that would include the proposed $ 250 billion for small businesses but also funding for hospitals , state and local governments, and food aid programs. In addition, half of that $ 250 billion would have to go to small business for women, minorities and veterans.
“Democrats know that the paycheck protection program must work for everyone in order for it to be successful,” Pelosi said in a statement Wednesday in response to the depletion of funds. “As has become clear since last week, the Republican bill that does not address these critical issues cannot be passed unanimously in the House of Representatives.”
Senate Majority Leader Mitch McConnell said the Senate is unlikely to return to Washington, DC until May 4. The Republican leader wanted to unanimously approve the $ 250 billion funding on April 9, but the move was rejected.
In a statement, McConnell said Americans “earn paychecks, not pink slips of paper caused by political games”.
“President Trump, Secretary of State Mnuchin, and Senate and House Republicans just want more funding for this job-saving program that both parties have jointly developed,” said McConnell. “There is no time to insist on extensive renegotiations or ultimatums on other guidelines that both Houses unanimously approved. A clean financing of workers’ wages in a crisis should not be controversial. I hope our democratic colleagues will let Congress act this week. “
Even with a $ 250 billion infusion, small businesses can ask for more. Michael Strain, director of economic policy at the American Enterprise Institute, said demand for credit could exceed $ 1 trillion.
But while politicians debate additional funding, restaurant industry officials have pleaded with officials that the paycheck protection program is inadequate. While some off-site restaurants remain open, many are completely closed. Operators have stated that there is no point in bringing workers back on leave or laid off through the program for eight weeks if they still cannot safely reopen.
The recently formed Independent Restaurant Coalition wants the federal government extend the maximum loan amount to three months after restaurants are allowed to reopen and operate at full capacity. It also wants increase the program to more than $ 350 billion and set a gross revenue cap of $ 500 million to help smaller businesses get their stake. It also wants a $ 50 billion to $ 100 billion investment in restaurants and tax breaks to help with rent and reward companies for keeping employees.