Four weeks before its scheduled end, the federal government's flagship aid effort for small businesses ravaged by the pandemic - the Paycheck Protection Program - ran out of funding on Wednesday afternoon and stopped accepting most new requests.
Congress has allocated $ 292 billion to fund the program's latest round of loans. Almost all of that money is now depleted, the Small Business Administration, which manages the program, told lenders and their business groups on Wednesday.
While many predicted that the program would run out of funds before the May 31 application deadline, the exact timing surprised many lenders.
"We understand that lenders are now receiving a message through the portal that loans cannot beissued, "the National Association of Government Guaranteed Lenders, a trade group, wrote in an alert to its members Wednesday night. “The P.P.P. the general fund is closed to new applications.
Some of the money - around $ 8 billion - is still available through a reserve for community financial institutions, which typically focus on loans to businesses run by women, minorities and other underserved communities. These lenders will be allowed to process requests until that money is exhausted, according to the trade group alert.
Representatives of the Small Business Administration did not immediately respond to a request for comment.
Funds also remain available to allow lenders to complete processing of pending applications, according to uNo lender who was in conversation with SBA officials on Wednesday.
Since its inception last year, the Paycheck Protection Program has disbursed $ 780 billion in forgivable loans to fund $ 10.7 million. requests, according to the latest government data . Congress renewed the program as a relief in December bill, expanding the pool of eligible applicants and allowing the most affected companies to return for a second loan.
Lawmakers in March extended the program deadline in May, but they showed little enthusiasm to add a lot more money to its coffers.With the increase in vaccination rates and the assoFurther restrictions in large-scale relief efforts for small businesses have declined.
Recent government efforts have focused on the most devastated industries. Two new grant programs run by the Small Business Administration - for businesses in live- events and restaurants - has started accepting applications in recent weeks, but no grants have yet been awarded.