Small Business Fund Runs out of Money

Commentary & Community

Small Business Fund Runs out of Money

 

The federal government’s program offering forgivable loans to small businesses affected by coronavirus ran out of money today. Senators are making little progress in resolving differences over legislation that would replenish this fund.

 

The third coronavirus relief bill contained $350 billion for the Paycheck Protection Plan (PPP). The PPP provided forgivable loans to small businesses as long as they kept paying employees and met other conditions. There was such a strong response to this program that the initial $350 billion soon proved inadequate. There were signs soon after its implementation that the program would run out of money in mid-April.

 

Senate Majority Leader Mitch McConnell (R-KY) attempted to pass legislation to provide another $250 billion. Senate Minority Leader Chuck Schumer (D-NY) objected, meaning that the Democrats would filibuster the attempt. He desired more money for hospitals and state and local governments added to the small business aid. The two sides have been negotiating since last week in an attempt to overcome their differences.

 

The House of Representatives is likely to follow the lead of the Senate on this issue. Democrats in that body are also supporting the same aid demands as the Senate. However, if the Senate passes a small business aid bill without the additional funding, the House is unlikely to stop it.

 

There will likely be legislation to provide this small business aid next week. What is unclear at this time is whether it will contain any funding for Democratic priorities.

 

Do you think that legislation to provide funds for small business loans should also contain money for hospitals and state governments?

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