On Thursday, April 16, 2020, the $349 billion that the CARES Act allocated to the Small Business Administration was depleted. The following message, “[t]he SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time,” was posted on the SBA’s website.
The SBA reported that more than 1.6 million applications were approved for an amount of almost $339 billion with an additional $10 billion is needed to for processing fees, bringing the total to the $349 billion that the Act provided. The average loan amount for all applications approved was $239,152. Construction firms had the most approved loans, followed by professional, scientific and technical service companies, manufacturers and health care and social assistance firms.
Congress does not know if they will provide more funding to the SBA, as the next steps in combating COVID-19 has become a political lightning rod. Democrats are opposing the GOP’s $250 billion infusion because they are demanding similar funding for hospitals and local governments. The deadlock has been going on for about two weeks. In the prior week, Democrats blocked the GOP’s small business bill and the GOP responded by blocking the Democrats’ bill that included funding for the Paycheck Protection Program and an additional $250 billion for hospitals and local governments.
However, even if Congress passes the next COVID-19 bill, some professionals note that an additional $250 billion will still not be enough. Richard Hunt, Consumer Bankers Association President and CEO, stated that he believes the United States is going to need more than $1 trillion to cover all of America’s small businesses.
We are watching this situation closely and will keep you updated. If you have questions about any of the CARES Act’s loans, one of our attorneys can assist you. Please do not hesitate to contact the Wladis Law Firm. We will do our best to provide you with updates and will be available to answer questions as circumstances change. We may be reached at (315) 445-1700 or by e-mailing Attorney Jennifer Huse Granzow at firstname.lastname@example.org or by reaching out to your everyday firm contacts.