Coronavirus Loans: Democrats Block More Funds For SBA Loans Seeking Add-Ons

Senate Democrats on Thursday thwarted Major Leader Mitch McConnell’s effort to expand the emergency small business loan program, holding out for more cash for hospitals, and local and state governments. McConnell had planned to get the measure approved by unanimous consent.

McConnell then adjourned the Senate for the day.

Sen. Ben Cardin, D-Md., voiced an objection to the move, saying money is needed for businesses that don’t already have relationships with banks following reports some banks were favoring existing customers.

McConnell accused Democrats of gamesmanship, saying they only were opposing the measure “because you want something more.” He then blocked a Democratic amendment.

House Speaker Nancy Pelosi told NPR Wednesday Democrats want to reserve $60 billion of the next tranche for “community development financial institutions” to open the funds to a wider audience.

“It’s really important because we cannot solidify the inequalities in access to capital that exist in our economy at a time when we are addressing the coronavirus crisis,” she said.

House Democrats are expected to take up emergency legislation Friday, but Republicans are likely to block it, as well.

President Trump has said he supports another round of funding for Small Business Administration loans. Banks began taking applications on Friday for the $349 billion in funds that were part of the $2.2 trillion emergency economic rescue package that was signed into law late last month. The payroll protection loans, which are limited to $10 million, are to be forgiven if businesses keep their employees on the payroll. They can also use the money to pay for rent and utilities. The funds were expected to be exhausted quickly.

Pelosi and Senate Minority Leader Chuck Schumer said they want to see $250 million for hospitals, healthcare systems, state and local governments, and food stamps in the next emergency bill – the fourth since the pandemic began. Pelosi said she’d like to see the amount allocated for SBA loans pared to $125 billion with $125 billion more going to community-based lenders and SBA disaster assistance loans and grants.