America’s Small Business Administration is out of money after reaching its $349 billion limit. According to a statement issued on the SBA website yesterday, it will no longer be able to issue any new loans.
The program was designed to help companies suffering difficulties in the wake of the coronavirus pandemic shutdown. In addition, however, along with not being able to accept new applications for the Paycheck Protection Program, the SBA also said it wasn’t able to enrol new PPP lenders either.
Having been approved by Congress last month the PPP was designed to allow employers to keep their payroll on track, without the need to lay-off or furlough them during the current crisis. The Paycheck Protection Program was just one part of a larger $2 trillion Coronavirus Aid, Relief and Economic Security Act (CARES Act),
Although the SBA has stated that by yesterday 1.3 million PPP loans have been approved to date, worth over $296 billion, with an average loan size amounting to $239.152, any future approvals are now on hold.
No more money
US Treasury Secretary Steven T. Mnuchin and US Small Business Administration Administrator Jovita Carranza issued the following statement regarding the Paycheck Protection Program and Economic Injury Disaster Loan Program:
“The SBA has processed more than 14 years’ worth of loans in less than 14 days. The Paycheck Protection Program is saving millions of jobs and helping America’s small businesses make it through this challenging time. The EIDL program is also providing much-needed relief to people and businesses.
By law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations.
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.
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.”