Photo | Grant Welker
It's 5 p.m. on a weekday but Worcester's Major Taylor Boulevard is empty, a sign of coronavirus-related shutdowns.
April 16, 2020
The $349B small business coronavirus bailout program has run out of money
Photo | Grant Welker
The Chocksett Inn in Sterling has temporarily closed, one of countless food, retail and hospitality businesses to have to do so during the pandemic.
By Grant Welker
New loan applications for the federal Paycheck Protection Program meant to help small businesses survive through pandemic-related closures and loss of revenue are no longer being processed, two top officials said in a statement late Wednesday.
The $349-billion program is a potential lifesaver for small businesses across the country, but the funds were approved before anywhere near all of those who need the money have been able to receive the funds, or for some, even apply.
U.S. Treasury Secretary Steven Mnuchin and U.S. Small Business Administration Administrator Jovita Carranza on Thursday urged Congress to approve additional funds for PPP to allow more businesses to benefit. The SBA said separately applications for Economic Injury Disaster Loans are also no longer being accepted.
“By law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations," Mnuchin and Carranza said in a statement Wednesday evening. “The high demand we have seen underscores the need for hardworking Americans to have access to relief as soon as possible. We want every eligible small business to participate and get the resources they need.”
Until then, the program is not able to process loan applications, they said.
[Related: Another 103K Mass. workers file for unemployment]
U.S. Rep. Jim McGovern, a Worcester Democrat, said on Twitter on Wednesday that House Democrats are working toward a solution to give more money to vulnerable small businesses, more disaster relief and more eligibility to small farmers.
U.S. Katherine Clark, a North Shore Democrat whose district includes eight MetroWest communities, said she's supporting an effort to cover all wages for workers earning up to $100,000 and to ensure workers keep their healthcare benefits.
PPP, which launched April 3, is designed to provide loans of up to $10 million to businesses and nonprofits with fewer than 500 employees. A portion of the PPP loans can be forgiven, particularly if businesses use the money to keep people employed. The EIDL program is completely separate and can cover losses businesses have incurred directly linked to the coronavirus disaster.
SBA's Massachusetts office didn't return a message seeking comment Thursday morning.
Very few small businesses have yet to see checks arrive, according to the COVID Loan Tracker, a private website gauging funds paid based on surveys from more than 9,000 businesses.
[Related: Worcester County has deadliest coronavirus day on Wednesday, doubling previous high]
Roughly 5% have received PPP loans through Thursday morning, the website said, for a total of $110 million. The median company having already received money has 12 employees and received $108,000.
Around 3.5% of small businesses have received EIDL funds, according to the COVID Loan Tracker. For that program, the median company size is five employees, and the median grant size has been $5,000.
In Central Massachusetts, community bank leaders have said they experienced a flood of applications when the program began accepting funding requests.
Marlborough-based Main Street Bank said it helped 271 small businesses process loan applications through April 10, for a total of $46.6 million. The bank said it estimates those loans have supported nearly 1,000 local jobs.
[Related: Delays in elective surgeries due to COVID-19 hurting Hologic's revenues]
“Over the past week, our lending team has worked over 850 hours collectively, 7 days a week, to process these loans and support our customers," Walter Dwyer, the CEO of Main Street Bank, said in a statement. "That doesn’t even consider the additional assistance from our branches and back office employees working behind the scenes. All hands are on deck here.”
Rollstone Bank & Trust of Fitchburg said it processed more than 200 applications for approval totaling $32 million through Wednesday.
News of the government no longer processing loan applications came as another 103,040 Massachusetts workers filed for unemployment last week and nearly 5 million nationally, according to new figures released Thursday by the U.S. Department of Labor.
Nearly 572,000 Massachusetts workers have filed for unemployment in the last four weeks, or about 16% of the state's non-farm workforce of around 3.6 million.
WBJ Web Partners
Most Recent
Most Recent
0 Comments