The $350 Billion Small commercial loan Program Is Officially Out of cash. Lawmakers Can’t Agree On What Happens Next.

TOPLINE: The emergency small business loan program that's a cornerstone of the $2 trillion CARES Act has now exhausted its $350 billion in funding; as legion American small business struggle to handle the economic slowdown caused by the coronavirus, congressional Democrats and Republicans are unable to agree on the way to allocate more funds to the program.





KEY FACTS: 

  • On Thursday morning, the little Business Administration said on its website that it's “unable to simply accept new applications for the Paycheck Protection Program supported available appropriations funding. Similarly, we are unable to enroll in new PPP lenders now.”

  • The PPP allocates $349 billion for loans to small businesses that are struggling due to the coronavirus.

  • Treasury Secretary Steven Mnuchin and Democratic lawmakers will meet on Thursday to try and do to return to an agreement on a package that can immediately replenish the program’s funds, CNN reports.

  • Republicans lawmakers led by Senate legislator Mitch McConnell want to quickly approve an extra $250 billion for the program and save other provisions for future relief legislation.

  • Democrats, led by Senate legislator Chuck Schumer and House Speaker Nancy Pelosi, are pushing for more changes to the program which may expand funding to hospitals and state and native governments and permit more people (including those without an existing lending relationship with a bank) to be eligible for the emergency aid.


BIG NUMBERS
According to data released by the SBA, the common PPP loan size is about $240,000. the event industry has seen the foremost loan money to date, followed by the professional, scientific, and technical services industries. quite 1 million loans are approved.

CRUCIAL QUOTE
“The SBA has processed quite 14 years’ worth of loans in but 14 days,” Treasury Secretary Mnuchin and U.S. Small Business Administration Administrator Jovita Carranza said in an exceedingly joint statement on Wednesday. “We urge Congress to appropriate additional funds for the Paycheck Protection Program—a critical and overwhelmingly bipartisan program—at which point we'll everywhere again be ready to process loan applications, issue loan numbers, and protect plenty of more paychecks,” they continued.

KEY BACKGROUND

Under the Paycheck Protection Program, companies and nonprofits with fewer than 500 workers can apply for loans of up to $10 million at 1% interest to so as that they're visiting cover two months of payroll and overhead expenses. If the borrower retains workers and doesn’t cut their wages, the govt. will forgive most or all of the loan and repay the bank lenders. The launch of the program period ago was chaotic: banks said guidance from the center was too slow to return back back back (lenders were still waiting on information about the program within the last word hours leading up to its launch) and confusing once it finally arrived. Banks have reported overwhelming demand from small businesses seeking financing; on Tuesday, JPMorgan JPM said it's already seen quite 300,000 applications worth $37 billion