The two federal loan programs that small business owners have been counting on to survive the coronavirus pandemic stopped taking applications on Thursday because they ran out of money.
The U.S. Small Business Administration said the $349 billion lending limit for Paycheck Protection Program loans to be backed by Uncle Sam had been met. The $17 billion allocated for the Economic Injury Disaster Loan program and a companion advance of up to $10,000 has been exhausted as well.
SBA administrator Jovita Carranza and Treasury Secretary Steven Mnuchin called for more funding as thousands of loan applications await processing. "We urge Congress to appropriate additional funds. ... We want every eligible small business to participate and get the resources they need," they said in a statement.
However, congressional leaders remained at a standoff over how to replenish the loan programs.
Republicans’ bid to add $250 billion to the PPP stalled as Democrats remained dug in on their demand for a broader stimulus bill.
The SBA said nearly 1.7 million PPP loans have been approved since the program launched April 3, including more than 40,000 in New York State. The agency couldn't provide similar numbers for Long Island, or for the EIDL program.
Local small business organizations expressed concern about the future of PPP and EIDL.
“Our small businesses will evaporate if additional funding doesn’t become available soon,” said Robert G. Fonti, a property manager and co-chairman of the Long Island Business Council, which lobbies government on behalf of entrepreneurs. “A lot of small businesses will be out of business in the next week to 10 days.”
Senate Minority Leader Chuck Schumer (D-N.Y.) began talks with Mnuchin Wednesday, but the two sides came up empty.
Senate Majority Leader Mitch McConnell (R-Ky.) expressed disappointment that Democrats had not relented on demands to add $100 billion for hospitals and $150 billion for state and local governments to the $250 billion for PPP.
“Five million more Americans lost their jobs just last week,” McConnell said. “Americans need Democrats to stop blocking emergency paycheck money, and let this job saving program reopen.”
House Speaker Nancy Pelosi defended her position by pointing out that Republicans refuse to include the money that Democrats requested in the interim bill.
“When we all know we want to help small businesses, why would you turn your back on the hospitals who are delivering the services?” Pelosi said.
With Tom Brune