The coronavirus has changed the lives of everyone, affecting people in many different ways, with small businesses taking a major hit. Trying to stay afloat during this crucial time, many owners are taking it a day at a time, trying their best to keep their business up and running. But what happens when finances begin to run slow and eventually run out? How will small businesses stay afloat? How will they be able to pay their employees? These questions are the unfortunate fate many small businesses are facing today.
The Small Business Administration announced this Thursday their relief program has run out of money. The $350 billion relief program was created for companies with up to 500 employees to be given financial relief and cover expenses such as payroll and overhead. If companies do not lay off any employees, they do not have to worry about paying back the loan.
The Paycheck Protection program passed by Congress in March was a part of the $2 trillion emergency stimulus package. They received an overwhelming response, with business owners sending in their applications in need of financial assistance. In total there were more than over a million applications submitted totaling $339 billion being needed to cover the businesses’ finances.
In a matter of two weeks, the SBA has run out of relief funds to give to small businesses, leaving many in a space of uncertainty. Additional funds to put into the relief program have currently been blocked, with owners left unsure of where their next funds will come from. Currently the SBA is not taken any new applications for loans and grants.
With lawmakers locked in a partisan stalemate on Capitol Hill, small businesses will have to wait until a final decision is made on how more funds will become available for the relief program. Consumer Bankers Association President, Richard Hunt told reporters he believes the country will need up to $1 trillion “in order to satisfy the demand of America’s small businesses”.
The next scheduled meeting for the Senate is scheduled for Monday. Hopefully by then, there will be an end to the stalemate with business owners having a clear answer of what is next to come.