More than 200 national and state-based trade groups wrote to congressional leadership today calling on Congress to increase funding for Paycheck Protection Program (PPP) loans.
That program was authorized by the CAREs Act last month and, among many other programs, provided individually and family-owned businesses with $350 billion in loans to help those businesses retain their employees during the COVID-19 crisis.
According to the latest figures from the Small Business Administration, however, applications to date number over million and nearly$300 billion of the initial authorization. The expectation is that the program will run out of authorization by the end of the week.
With both the House and Senate in recess until May, its unlikely Congress will be able to agree to – and pass by unanimous consent – specific changes to the loan program. A simple increase in the loan’s authorized amount, however, is both possible and badly needed – the demand for these loans is high and there are millions more small businesses who need them to survive the crisis intact. As the letter says:
In just a few weeks, the PPP has emerged as a central and effective response to the economic damage resulting from COVID-19. PPP loans are providing a vital source of liquidity to more than a million individually and family-owned businesses whose operations have been curtailed or shut-down by stay-home orders and other government actions taken in response to the virus. These businesses, in turn, are using the loans to keep millions of Americans employed.
According to the Small Business Administration, however, banks have already committed most of the $349 billion provided to capitalize the PPP, and it is likely the program will run out of money within the week, leaving millions of additional businesses without the funds necessary to keep their workers employed.
While the chance of increased funding appears low at the moment, we expect that will change in the coming days when millions of business owners are told by their banks that PPP loans are no longer available. The economic damage caused by stay home orders is immense and growing. The federal response needs to grow with it.