The Federal Small Business Loan Program Is Out Of Money. Millions Haven't Even Applied.
The email from the Small Business Administration appeared in my inbox yesterday at 5:40 p.m.: the Paycheck Protection Program was out of money.
The fund, which at $349 billion had seemed enormous at first, was, like so many coronavirus relief measures, not nearly enough.
“The SBA has processed more than 14 years’ worth of loans in less than 14 days," the email read. "By law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations."
PPP loans can be forgiven if they are used to keep employees on the payroll. They were enormously popular with small business owners whose livelihoods were upended by the coronavirus outbreak and restrictions put in place to contain its spread.
According to an internal SBA PowerPoint shared with LAist, more than 54,000 small businesses in California were approved for loans in the first 13 days.
But because interest in the program overwhelmed banks, many small business owners hadn't yet been approved for a PPP loan, or hadn't even been able to apply.
"I am crushed. I did everything right," wrote Heather Jeffcoat, who owns Fusion Wellness and Physical Therapy.
Her bank, Citibank, didn't even begin accepting applications until a week after the PPP launched. The day it did, she applied within the first 90 minutes, but was still waiting to find out if she was approved.
"I have been sobbing since finding out this news," she wrote. "I will very soon have to make the decision of breaking all my leases and closing my doors if [stay at home] restrictions are not eased."
Meanwhile, Congress is deadlocked over whether to dump more money into the fund immediately, or add additional guidance on how the money should be allocated.
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