The government is approaching the $349 billion lending limit on its Paycheck Protection Program, leaving many Long Island business owners worried they will be shut out of the program to funnel relief money to the nation’s small businesses.
The Small Business Administration said that as of Wednesday afternoon, it had approved more than 1.4 million loans totaling more than $305 billion — up more than $50 billion since Monday. The Trump administration has asked Congress, which set the original ceiling, for another $250 billion for the program. However, that request has stalled in the Senate.
An email sent to the SBA for information about the agency’s next steps after the lending limit is reached was not immediately answered.
Long Island business owners Wednesday expressed growing frustration with the program, and increasing desperation about getting the cash they need to save their businesses during the pandemic shutdown.
Dozens of owners said they were unable to get updates on their PPP loan applications, or had been delayed in applying for loans because their banks had not been set up to accept applications or were only accepting applications from established business customers.
"Our local bank claims they have no way of checking on the status of our PPP loan after it has been submitted," wrote one owner. "How can we be sure the application is being processed?" She was one of more than 1,100 local business representatives who participated in a webinar on aid programs for businesses produced by Newsday and the Long Island Association.
It's unclear how much money has actually been distributed from the program, which launched April 3. Money that was held up by technological and legal issues and the sheer volume of applications began arriving in companies' bank accounts at the end of last week.
As of Wednesday, New York state had nearly 41,000 loans approved worth $11.7 billion, the SBA said.
The loans of up to $10 million at an interest rate of 1% carry the promise of forgiveness if the money is primarily used for retaining staffers or rehiring those who have been laid off.
A breakdown of the loans on the SBA website showed that as of Monday, the national average loan size was $239,152, and 70% of the loans were for $150,000 and under.
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