P3: Paycheck Protection Program Runs Out of Money for Small Business Loans


The Paycheque Protection Program (PPP), a new lending initiative aimed at helping small businesses overcome the economic fallout from coronavirus answer, is already short of money, according to a statement from the Small Business Administration.

Lawmakers had allocated $ 349 billion to the PPP as part of the $ 2 trillion stimulus bill that Congress passed in March, but those funds were ultimately nowhere near enough to meet demand. As of this week, banks and lenders have processed over 1.3 million loans, with as many as 700,000 small businesses and non-profit organizations awaiting funding.

PPP is an entirely new program that was created to provide forgivable loans to small businesses as they grapple with social distancing measures and other restrictions that have forced many people to shut down or temporarily downsize their businesses. services. The Economic Disaster Lending Program (EIDL), for which the stimulus package also included $ 10 billion, was also quickly exhausted.

Funding shortages aren’t the only issues plaguing small business lending recently lit by the stimulus. The programs have addressed technology delays, access issues and loopholes that allow large companies to reap key benefits.

Democratic and Republican lawmakers agree more money needs to be approved for the PPP, but are currently at a standstill over whether a new funding package should include money for the EIDL, as well as for them. States and hospitals.

So far, Republicans have pushed for the early approval of $ 250 billion in stand-alone funding to replenish the PPP. Meanwhile, Democrats would like to adopt a more ambitious interim spending plan and use the influence they have in Congress for that to happen.

There is a deadlock in Congress on how to spend new funding

The fight for new program funding for small businesses is based on a central disagreement between Democrats and Republicans over the scale of the stimulus packages.

Republicans would like to focus closely on the P3 program and called on Congress to unanimously approve this money so that lawmakers do not have to physically come back to vote and further delay this funding.

“Millions of small businesses are in limbo because Democrats refused to put aside partisan politics and fund this bipartisan agenda,” said Senator Marco Rubio, chairman of the upper house small business committee, in a statement. “I urge my colleagues to quickly pass a clean financing bill for P3s.”

Democrats, however, would like Republicans to allocate additional funds to boost hospitals and states, which are already suffering serious deficits due to coronavirus costs and declining revenues. They would like to see $ 100 billion allocated to health care providers, $ 150 billion for states and cities, and more support for SNAP.

Democrats also want to make sure that a portion of the new $ 250 billion in small business funding goes to the EIDL program, which provides repayable grants. And they would like to see guarantees that direct some of the PPP funding to community lenders, who are more accessible to minority-owned and rural businesses who are less likely to have existing relationships with big banks.

This recent PPP development is expected to put more pressure on Democrats as Republicans – including President Donald Trump – criticize their efforts to block a fundraising bill. Democratic leaders have signaled, however, that they do not plan to back down on such measures unless they receive concessions from the GOP.

All of this is further complicated by the fact that most lawmakers are working remotely at the moment and are unable to vote, which means any legislation should be passed with strong unanimous support. Since lawmakers cannot vote remotely, legislation would have to be approved either by unanimous consent or by voice vote of those who are physically able to be on the Hill. In either case, however, a lawmaker who opposes the process could try to prevent passage of the bill, so Congress must be fully in agreement for anything to be passed.

Due to the continuing disagreement between the two sides, additional funding for small businesses may not advance until lawmakers are able to physically return to Capitol Hill in May.

In the meantime, thousands of small businesses are simply having to wait.


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