Lawmakers were racing Tuesday to approve more money for a five-day-old emergency fund to rescue small businesses and their employees, saying demand from companies reeling from the coronavirus shutdown will deplete the $350 billion program much faster than expected.
The sudden move to replenish the Paycheck Protection Program came even as small business owners and banks reported more problems applying for the current pot of money.
Republican and Democratic leaders on Capitol Hill gave their support for moving ahead with additional money for the small business loan program as unemployment has skyrocketed, with 10 million applying for benefits just in the last two weeks.
Senate Majority Leader Mitch McConnell said he’s working with Treasury Secretary Steven T. Mnuchin and Minority Leader Charles E. Schumer to pass an additional funding bill by Thursday.
“Jobs are literally being saved as we speak,” the Kentucky Republican said in a statement. “But it is quickly becoming clear that Congress will need to provide more funding or this crucial program may run dry.”
President Trump said during a teleconference with bankers at the White House that the administration is seeking another $250 billion for the PPP.
“The way it’s going, we’re going to need that. People are loving it,” Mr. Trump said.
The president said the Small Business Administration has processed more than $70 billion in guaranteed loans as of Tuesday for more than 250,000 businesses.
Bank of America said it’s receiving several thousand applications per hour.
Mr. Mnuchin said the White House is hopeful that the extra aid will be approved by the Senate on Thursday and the House on Friday. He urged business owners to be patient.
“If you don’t get the money this week, there will be plenty of money for you next week,” he said.
House Minority Leader Kevin McCarthy of California, who had cautioned last week against moving too quickly to allocate more money to fight the coronavirus, said Tuesday he supports Mr. Mnuchin’s request for more money.
House Speaker Nancy Pelosi said on CNN that she spoke with Mr. Mnuchin on Tuesday about the additional funds, and she supports this “interim” bill to address immediate needs. But it was unclear whether the House will vote on Friday.
Mrs. Pelosi there are some “considerations” Democrats would like to add that would ensure minority business owners have equal access to the loans.
Fellow California Democrat Rep. Pete Aguilar, whip of the New Democrat Coalition, said his group of centrists Democrats supports the extra funds, but doubts it will clear the House this week. For that reason, the coalition is calling for “automatic triggers” that would immediately fund coronavirus-related programs, like the PPP, if the programs start to run out of money. It would also apply to the unemployment insurance program and direct payments to the American public.
Mrs. Pelosi is still looking to tackle a broader package — including infrastructure spending, election security and more money to state and local governments — in a “phase four” package. But the speaker has indicated that bill won’t be ready for a vote until after Easter.
The government reported last Friday that unemployment in March rose to 4.4 % from 3.5%, with more than 700,000 jobs lost due to the coronavirus pandemic. The data didn’t even include the second half of the month, when layoffs skyrocketed.
The economic package Congress approved in March allocated $350 billion in grants and loans for businesses with fewer than 500 employees. The plan includes a carveout for franchise owners who own more than one location, but not for holding companies that own several small businesses.
The PPP was designed to help business make payroll payments for eight weeks; the portion of the loans for salaries will be forgiven if companies keep their workers.
An SBA email to some lenders obtained by The Washington Times on Monday acknowledged that the agency’s electronic system for processing loan applications, called E-Tran, wasn’t coordinated with the PPP, causing delays and frustration. Complaints and problems with the rollout of the program persisted on Tuesday.
A business owner from Greensboro, North Carolina, described to The Washington Times his efforts to obtain a $10,000 “economic injury disaster loan” through the Small Business Administration. The man, who didn’t want to give his name, said he applied on March 27 for aid for his 20-year-old company after several attempts to navigate the agency’s confusing website.
Despite the SBA’s promise of action within three days, the man said he still hadn’t heard anything as of noon on Tuesday, 11 days later, despite repeated calls and emails.
“They screwed it all up, whether it’s computers, whether it’s personnel, whether it’s confusion,” he said. “Nobody has the guts to get out in front of a [expletive deleted] microphone and tell everybody what the hell is going on. They’re misleading the public, and it’s shameful.”
The Small Business and Entrepreneurship Council said Tuesday that PPP funds “are slowly beginning to flow, but none of our members have received an EIDL loan or the $10,000 emergency advance [as of noon on Tuesday].”
“Many applied several weeks ago for an EIDL,” the council said. “Some received an application number, others have not received any communication about the status of their application, not even acknowledgment of receipt. We understand that the SBA is under-the-gun and working hard to get these new programs launched, but many small businesses are making important decisions about the future of their businesses based upon EIDL eligibility.”
John Arensmeyer, CEO at the Small Business Majority, said his group is “skeptical that even with increased funding the PPP program will be robust enough to meet the needs of the smallest, most vulnerable small businesses.
“If there is one thing the difficult launch of PPP has made clear, it is that this program cannot and will not be the end-all be-all solution for small businesses in this economic crisis,” he said. “What most small businesses really need and what Congress ought to be focused on is providing unrestricted grant assistance, not additional funding for a convoluted loan process.”
The CEOs of Grand Rapids State Bank and Community Spirit Bank told the president Tuesday that one-third of community banks are not able to administer PPP loans, and they asked the administration to ensure that all community banks can participate in the program.
Mr. Trump said the program has experienced “a few glitches.”
“Any little glitch, we had worked out within minutes, within hours,” the president said. “It was all done probably, I would say, 100% of it, in the first day.”
SBA Administrator Jovita Carranza said the program is aimed at helping up to 30 million small business owners.
“I think they’re all approaching our phone lines as we speak,” she told the president.
• Dave Boyer can be reached at dboyer@washingtontimes.com.
• Gabriella Muñoz can be reached at gmunoz@washingtontimes.com.
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