Even with an infusion of $250 billion, small businesses may ask for more.
On Thursday, the $349 billion program for small businesses ran out of funds nearly two weeks after the application process opened, according to the Small Business Administration’s website.
The funds were a part of the stimulus package’s Paycheck Protection Program, which is providing forgivable loans to help businesses pay employees, rent, and utilities for eight weeks. The SBA website said 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 more than 14 years worth of loans in less than two weeks.
“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,” Mnuchin and Carranza said in a statement. “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.”
Before the funds ran out, the Trump administration urged Congress to approve an additional $250 billion. In response, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer introduced a $500 billion plan that includes the suggested $250 billion for small businesses, but also funds for hospitals, state and local governments, and those on food assistance programs. In addition, half of that $250 billion for small businesses would have to be earmarked for women, minorities, and veterans.
“Democrats know that in order for the Paycheck Protection Program to succeed, it must work for everyone,” Pelosi said in a statement Wednesday, in response to funds depleting. “As has been clear since last week, Republicans’ bill which fails to address these critical issues cannot get unanimous consent in the House.”
Senate Majority Leader Mitch McConnell said the Senate isn’t expected to return to Washington, D.C. until May 4. The Republican leader wanted to pass the $250 billion in funding on April 9 by unanimous consent, but the move was rebuffed.
In a statement, McConnell said Americans “deserve paychecks, not pink slips caused by political games.”
“President Trump, Secretary Mnuchin, and Senate and House Republicans simply want to add more funding for this job-saving program that both parties designed together,” McConnell said. “There is no time to insist on sweeping renegotiations or ultimatums about other policies that passed both houses unanimously. Clean funding for worker pay in a crisis should not be controversial. I hope our Democratic colleagues will let Congress act this week.”
Even with an infusion of $250 billion, small businesses may ask for more. Michael Strain, director of economic policy at the American Enterprise Institute, said the demand for loans could exceed $1 trillion.
But as politicians debate over additional funds, those in the restaurant industry have pleaded with officials about how the Paycheck Protection Program falls short. While some restaurants remain open via off-premises, many have shut down completely. Operators have said it wouldn’t make sense for them to bring back furloughed or laid-off workers via the program for eight weeks if they are still unable to safely reopen.
The recently created Independent Restaurant Coalition wants the federal government to extend the maximum loan amount to three months after restaurants are allowed to reopen and operate at full capacity. It also wants to increase the program to more than $350 billion and place a $500 million gross revenue cap to help smaller businesses get their share. It also wants a $50 billion to $100 billion investment in restaurants and also tax rebates to help with rent and to reward companies for keeping employees.