As of Thursday April 16th, Jovita Carranza, head of the Small Business Administration (SBA) announced during a White House press conference that the $349 billion Paycheck Protection Program’s funds have completely evaporated. This rescue fund was passed as a piece of Congress’ $2 trillion CARES Act at the beginning of April specifically in an attempt for businesses to maintain normal operational status.
“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,” said Carranza during Thursday’s press conference.
The Paycheck Protection Program made businesses eligible to receive up to 2.5 times their total monthly payroll in order to pay employees their regular salaries. This plan offered a 1% interest rate and repayment dates were delayed for six months. Virtually all businesses were eligible to apply who had fewer than 500 employees, including freelancers, non profits, and sole proprietorships. However, since the funds for this effort have been depleted, Congress is planning a method of replenishment to make more funding available in this time of need.
U.S. House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer have ideas to isolate money for the community development of financial institutions, like credit unions and smaller banks to funnel funds to small businesses without extra strings attached. Republican lawmakers, however, are pushing to simply add more money to the existing Paycheck Protection Program without extra complications. Meanwhile, small businesses in need are forced to wait on a decision from Congress in order to apply for more (much needed) funding to stay afloat.