The federal Paycheck Protection Program (PPP) designed to keep small businesses afloat and their employees paid during the coronavirus pandemic, has a zero balance as of April 16.
A total of $349 billion was set aside for the PPP as part of the Cares Act Congress and the president signed off on last month.
It took just nine business days for small businesses to exhaust the resources. The first-come, first-serve program started with that $349 billion on April 3, minus $10 billion for administrative costs.
The remaining funds drained quickly since then:
- by Monday, April 13 at 3 p.m., there was $111 billion left
- by 5:30 p.m. that same day, another $ billion was lent out
- 24 hours after that, by 5:15 p.m. on Tuesday, April 14, there was $71 billion left
- around the close of business on Wednesday, April 15, $31 billion of loans were still available
However, just before 9 a.m. on April 16 , the U.S. Small Business Administration (SBA) which has been overseeing the PPP loans, said it could not accept any more applications, meaning the PPP funds are now effectively at zero.
The magnitude of this effort cannot be understated. It involved more than 4,900 lenders, approving more than 1,637,000 loan applications, in less than two weeks.
The concern however, has been that the smallest of the small businesses, the mom and pops, are being crowded out by larger employers that still qualify as small businesses, and have better access to lenders responsible for shelling out the PPP funds.
For example, a large restaurant chain, with more than 5,000 employees, just got a $20 million PPP loan.
But those businesses want to keep their employees getting paychecks too, to keep the economy afloat.
Just one more thing Congress must consider as it is debating another $250 billion injection into the PPP. U.S. Rep. Jim Himes from the 4th Congressional District told NBC Connecticut News on April 15, “I do think there will be another installment.”
That help needs to come soon though. Some of the mom and pops have said they’re not sure how long they can hang on.
There also has been the question of what small businesses that have applied for PPP loans but have not heard back should do. Some other resources they can pursue have dried up as well, like the SBA’s program that gives small businesses $10,000, quick advance loans.