SBA Runs Out Of Coronavirus Paycheck Protection Funds, Lawmakers Stymied On Reboot

The $349 billion fund set up to help small businesses keep their employees on the payroll amid the coronavirus pandemic ran out of money Thursday morning, the administration said. The Small Business Administration said on is website it would accept no more applications for funds from the paycheck protection program or for economic injury disaster loans.

Banks began accepting applications for the loans late last week, with many focusing on existing customers and leaving some of the smallest businesses on the sidelines.

“Lapse in Appropriations Notice: 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,” the SBA notice said.

“EIDL applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.”

It was unclear, however, how much of the money actually had been disbursed. Only a fraction of the nation’s 30 million small businesses actually applied. The administration said Wednesday loans were averaging $240,000 although businesses were eligible for as much as $10 million.

The administration has asked that $250 billion be added to the fund for businesses with fewer than 500 employees, but partisan wrangling stalled action this week. Democrats want to fix some of the shortcomings of the $2.2 trillion rescue package that was adopted March 27, adding carve-outs for minority- and women-owned businesses, as well as for community-based lenders. They also want to add funds for hospitals and state governments reeling from the costs of handling the pandemic, along with expanded funding for food stamps.

Both the House and Senate are in recess until May 4 and holding pro forma sessions. Any legislation would have to be passed by unanimous consent, meaning a single lawmaker could hold up a bill in either house. Democrats thwarted an effort by Senate Majority Leader Mitch McConnell Monday to push a bill through. Another attempt by Republicans was expected later Thursday.

Sen. Marco Rubio, R-Fla., accused Democrats of holding the paycheck protection program hostage.

There may be signs Democrats could support the standalone paycheck funds. Sen. Kyrsten Sinema, D-Ariz., said the Senate should act before the end of the week.