Funding for a popular loan program to help small business stay afloat during the coronavirus pandemic is nearing depletion and could be exhausted by the end of Wednesday or midday Thursday.
The Small Business Administration has helped issue 1.3 million loans totaling $305 billion through the Paycheck Protection Program (PPP) as of Wednesday evening, putting the program on track to hit its $349 billion limit before Friday.
The Small Business Administration (SBA) has backed loans averaging almost $240,000 each.
The lending facility was implemented as part of the $2.2 trillion coronavirus relief package President Trump signed into law March 27.
After a flood of applications overwhelmed banks and credit unions across the U.S., industry advocates have urged Congress to quickly replenish PPP funding before another backlog of applications piles up.
Richard Hunt, president of the Consumer Bankers Association, told reporters during a Wednesday call that lenders would need roughly $1 trillion to satisfy demand for PPP loans.
Hunt also argued that efforts to steer funding toward specific communities and demographics could “slow down” the rescue lending program to the peril of small businesses.
“Lenders, banks should not be given preferential treatment, depending on their asset size or the communities they serve,” he said. “We need speed. So if Congress would just pass what we call a clean bill so we can get more money out to small businesses. that would be ideal.”
Administration officials and congressional leaders are scrambling to add more funding.
Senate Democratic Leader Charles Schumer (N.Y.) and Treasury Secretary Steven Mnuchin spoke again Wednesday in hopes of reaching a deal to provide an additional $250 billion for the program, as well as at least $250 billion for hospitals and state governments.
Senate and House Democratic staff were scheduled to speak with Treasury officials later in the day.
Democrats say a deal must set aside SBA loans for women- and minority-owned businesses in underserved urban, rural and tribal communities.
They say the $250 billion for the small business lending program must be paired with $100 billion in new funding for hospitals and $150 billion in new money for state and local governments facing budgetary short falls because of the pandemic.
Speaker Nancy Pelosi (D-Calif.), who is working closely with Schumer, issued a statement Wednesday afternoon reiterating Democrats’ demands.
“Democrats know that in order for the Paycheck Protection Program to succeed, it must work for everyone. That is why we have been asking for the administration to work with us to help: the underbanked small businesses and others who are struggling to access the PPP; desperate state and local governments; hospitals on the front lines of the epidemic,” she said in the statement.
“As has been clear since last week, Republicans’ bill which fails to address these critical issues cannot get unanimous consent in the House,” she said.
Senate Majority Leader Mitch McConnell (R-Ky.) last week asked for unanimous consent to pass a clean $250 billion infusion of funding for the small-business lending program but Senate Democrats objected, citing the need for hospitals and state and local governments to also receive more money.
Niv Elis contributed.
Updated at 5:07 p.m.