Amherst, NY (WBEN) - The government's key COVID-19 relief program for small businesses has run out of money.
The Small Business Administration said Wednesday that the Paycheck Protection Program has been exhausted. As of Sunday, the PPP had given out nearly 10.8 million loans worth more than $780 billion since April of last year.
The program, which has run out of cash and refunded by Congress twice before, was scheduled to expire May 31. It's not yet known if lawmakers will approve another round of funding.
The SBA said in a statement it will still fund applications that have been approved. New applications made through Community Financial Institutions, which are financial lenders that serve underserved communities, would also be funded.
AJ Baynes of the Amherst Chamber of Commerce says the fact the money ran out before the deadline is an indication of how difficult the pandemic and shutdown have been on small businesses. "Exhausting the PPP funding goes to show how desperate the business community is to get funds into their businesses," says Baynes.
Baynes urged businesses to apply early, and says he was fortunate to get help from the banking community. "They've been very hands on," says Baynes. "We did have some who had some holdups but we were able to shepherd them through the process, and we have not heard from anyone who was shut out or denied."
As for the future of PPP's third round, Baynes says that's anybody's guess. "I think we'll continue to advocate on behalf of the business community to impress upon Congress should there be a need for another round of funding, even if it is a smaller amount or a potential third draw, we'll take a look at what the demands are in this community," adds Baynes.
More than half the loans and nearly a third of the loan money were distributed this year. The average loan size was $46,000, less than half the $101,000 average loan in 2020. That is a sign that smaller companies unable to get loans last year were now getting funding. Companies have been drawn to the loans because they promised forgiveness if the money is used for payroll and other essentials.
But, while the PPP helped save many companies devastated by the pandemic, the Biden administration has estimated that more than 400,000 U.S. businesses have permanently closed due to the virus.
More aid is still available to small businesses through SBA Economic Injury Disaster Loans, and restaurants with no more than 20 locations can apply for grants through the Restaurant Revitalization Fund that began accepting applications on Monday. Help is also available to owners of theaters and other entertainment companies under the Shuttered Venues Operator Grants.
