The Paycheck Protection Program Ran Out Of Funding. What’s Next For Small Business Owners?

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The Paycheck Protection Program has run out of funding. Here's where the program stands now:

From April 3—when the Paycheck Protection Program was launched—through April 16, more than 1.6 million loans were approved by almost 5,000 participating lenders.The SBA has processed more than 14 years’ worth of loans in less than 14 days,” said U.S. Treasury Secretary Steven T. Mnuchin and SBA Administrator Jovita Carranza in a joint statement Wednesday., due to problems including late and in many cases unclear guidance sent to participating banks by the federal government.

Under the current rules, a business who employs 500 people or less could qualify for up to $10 million in forgivable loans. To get forgiveness, the loan proceeds must be used to cover certain expenses, including payroll at a non-reduced rate for eight weeks from the time the loan is received. But the hardest hit businesses which aren’t generating any revenue may have already laid off workers and may not find the promise of a forgiven loan sufficient reason to bring them back.

Additionally, of the loans that have already been disbursed, a disproportionate number have been paid out to just a handful of industries. For example, SBA data from April 13 shows that construction companies received the biggest slice of the $349 billion pie, netting 13.73% of approved funding. Businesses in the arts, entertainment and recreation industries—which are presumably among the hardest hit—received just 1.49% of the approved funding.

“As of right now, we are waiting on Congress to approve additional funding. Loans cannot be approved at any institutions until then,” says Nick Simpson, senior vice president for public affairs at the Consumer Bankers Association.

 

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All gone to the big small businesses like Ruth Chris?

Just print more...

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