The Small Business Administration on Thursday morning stopped taking applications for two emergency COVID-19 loan programs providing a financial lifeline to employers, racing through more than $345 billion in less than two weeks.
Another $250 billion could be available to replenish loan funds; the White House and Republican and Democratic congressional leaders have yet to strike a deal.
For now, the window closed on two programs employers jumped on to keep their organizations viable during government-mandated lockdowns: The the Paycheck Protection Program, designed to pump money to small businesses and nonprofits to cover payroll and other expenses and the Economic Injury Disaster Loans.
A key feature of the PPP loans is they are, if used as intended, convertible to grants. The window to apply for the PPP loans opened April 3.
On Thursday morning, the SBA said in a statement that due to a lapse in appropriations, the “SBA is unable to accept new applications at this time for the Paycheck Protection Program or the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding.”
“EIDL applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.”
On Wednesday night, Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza, who is from Skokie, issued a statement regarding the two programs:
“The SBA has processed more than 14 years’ worth of loans in less than 14 days. The Paycheck Protection Program is saving millions of jobs and helping America’s small businesses make it through this challenging time. The EIDL program is also providing much-needed relief to people and businesses.
“By law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations.
“We urge Congress to appropriate additional funds for the Paycheck Protection Program — a critical and overwhelmingly bipartisan program — at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks.
“The high demand we have seen underscores the need for hardworking Americans to have access to relief as soon as possible. We want every eligible small business to participate and get the resources they need.”