Will we have to fight the Paycheck Protection Program battle all over again? With the House poised to approve another $310 billion in funding for the suspended program, its lenders warn that the money won’t go far this time, either. That amount of money will just about cover the applications that got stuck when the cash ran out two weeks ago, they told the Associated Press, but not much more than those:
The more than $300 billion set aside to replenish the emergency loan program for small businesses impacted by the coronavirus pandemic is likely already all spoken for, banking industry groups said Wednesday.
The initial $349 billion set aside for the Paycheck Protection Program ran out on April 16, after being available for less than two weeks. The Senate has approved an additional $310 billion for the program, which the House of Representatives is expected to vote in favor of later this week.
But banking groups say the volume of applications already sent to the Small Business Administration makes it likely that much, if not all, the new money will go to those already in the queue. Any new applicants would likely miss out on this funding round.
Great. We waited for two weeks for Congress to get back into session and do its job, and it turns out all they did was their make-up work. But what about the new rules and restrictions on applications, and the set-asides for community banks? Surely that will offer some new opportunities for small businesses.
Er … not exactly:
Roughly a third of the new money has been set aside for smaller banks, which may allow a few new applicants to squeeze into the queue. However, small banks have said for the last two weeks that they have been swamped with applications — doing an entire year’s worth of loans in a weekend — so it’s likely most of that money is now spoken for as well.
If that’s the case, how did Congress settle on the $310 billion figure in the first place? Didn’t anyone think to ask how much was in the backlog first? Or did this figure arise so that Nancy Pelosi and the Democrats would retain enough leverage to force a block-grant bailout for state and local governments in Phase 4, holding up more PPP funds as the carrot for Mitch McConnell and the Republicans? This is yet another consequence of having a Brave Sir Robin Congress in a national crisis, refusing to stand its post while demanding that other essential workers put themselves at risk. Had Congress remained in session, this money could have flowed more rationally and with enough oversight to ensure against … whatever this is, whether it’s incompetence or just high-stakes brinksmanship.
In the meantime, we have essentially moved no distance at all on PPP. Sure, this tranche will clear the backlog, but it won’t do much for those businesses that couldn’t even get into the backlog at all. With the meltdown in the job market still rolling at a massive pace, this won’t stop it, or likely even slow it down all that much. It’s yet another reminder that the only way to keep these jobs from evaporating altogether is to get the employers back open and operating ASAP.