One of the most sweeping business bailouts in U.S. history ran out of money Thursday, leaving millions of small business owners and workers in financial limbo.
The $ 349 billion paycheck protection program was completely depleted after just 13 days of operation as Congressional Democrats refused to allow a general funding extension without also approving additional funds for other programs. relaunch.
The program, known by the acronym PPP, was created to help small businesses stay open and continue paying their employees for up to eight weeks. The relief is unprecedented: the federal government is granting loans that will be completely forgiven later if they are used to cover salaries, leases and utilities.
But on Thursday morning, the Small Business Administration sent a notice saying it was currently “unable to accept new applications … based on funding available credits.”
The SBA said before the freeze, at least 1.6 million businesses had been approved for loans under the program. But the money was disbursed on a first-come, first-served basis, and with 30 million small businesses in the country, millions more have been left on hold with no indication of when they might see the money from. relief.
“It’s more and more desperate,” said Holly Wade, research director for the National Federation of Independent Businesses, a leading organization for small businesses.
“A lot of our members haven’t heard if they’ve been accepted into the program, or what,” she said. “I think there will be a lot of panic today and the next few days.”
President Donald Trump’s administration and Republicans in Congress proposed last week to add an additional $ 250 billion to P3 funding. But Democrats clashed, with Senate Minority Leader Chuck Schumer and House Speaker Nancy Pelosi arguing that at least some of that funding must go to community banks and areas where small businesses have little. or no access to these loans. Democrats are also pushing for increased funding for hospitals, state and local governments, and the SNAP program, formerly known as food stamps.
” We do not want [the next bill] to perpetuate the credit disparity for some of our businesses, ”Pelosi told reporters on a call Thursday. She said Democrats were concerned about small businesses, but also saw money for hospitals, states and cities as urgently needed.
The speaker said she would not be in a rush by the Trump administration.
“I received a call from the Secretary of the Treasury [last week] saying he needed a quarter of a billion dollars within 48 hours, ”Pelosi said, stopping before adding,“ Oh really?
Republicans blasted Democrats for what they described as taking the livelihoods of millions of people hostage.
“Now is not the time for politics,” minority parliamentary leader Kevin McCarthy said on his own conference call with reporters. “This money is not going to anyone except to keep people in the job … All they have to do is say yes today, and let’s move on.”
When it was frozen on Thursday, the PPP had allocated some $ 339 billion of the $ 349 billion set aside for small businesses. According to a Senate adviser familiar with the matter, the SBA told lawmakers it needed the remaining $ 10 billion to pay the fees it had agreed to pay to lenders involved in the program.
One group is particularly affected by the impasse: the self-employed, a category that includes a wide range of workers including many farmers, plumbers and accountants. The vast majority of small businesses are sole proprietorships or other forms of one-person businesses.
Self-employed workers weren’t allowed to apply for the Small Business Program until a week ago because the SBA needed time to draft guidelines on how banks should work with them.
As a result, many were placed in the back of the queue for help.
White House and Congressional leaders continue to negotiate a funding patch for the PPP as well as another smaller program that is also strapped for funds – the Economic Disaster Loan, or EIDL. There is not yet a clear timeline for a possible deal.