Emergency funding for small businesses is running on empty.
The Paycheck Protection Program, the $350 billion lending program designed to expand the access and availability of loans to struggling small businesses, has officially reached its cap, according to a Thursday morning email from the Small Business Administration (SBA), the government agency that processes the loans.
The SBA notes that the agency is unable to accept any new applications for the PPP program based on available appropriations funding, and that is it also unable to enroll new PPP lenders at this time. The SBA has approved 1,661,397 applications and 4,975 lending institutions to date.
Small business owners desperate for cash should think twice before entering their personal information on multiple websites taking applications for loans, according to Ami Kassar, an Inc. columnist and founder and CEO of MultiFunding, a small-business loan adviser. "However, it is not risky to put in a new application at a local bank or credit union," Kassar says. "If your PPP application hits the SBA twice, the worst that will happen is that the second application will get rejected."
President Trump announced the program on March 27 as part of the $2 trillion coronavirus stimulus package known as the CARES Act. Applications for the program were first released on April 3 for small businesses and sole proprietors and then later April 10 for independent contractors and self-employed individuals.
Currently, Senate Democrats and Republicans are in agreement to add $250 billion to the program but are at an impasse over expanding the assistance to include health care workers and others, and whether to add restrictions to the funds.