As congressional leaders wrangle over a new infusion of cash, the U.S. Small Business Administration’s Paycheck Protection Program was expected to run out of money Wednesday, leaving an unknown number of Arizonans without the lifeline they sought to help cope with the COVID-19 crisis and subsequent economic downtown it triggered.
The SBA told lawmakers this week that it would deplete the last of the $349 billion it was allocated by Congress. The Wall Street Journal reported that, as of Wednesday morning, some 1.3 million loan applications worth $289 billion had been approved.
Democratic and Republican lawmakers, as well as President Donald Trump’s administration, have all agreed that the program needs more money and are looking to approve a $250 billion infusion. But that hasn’t happened yet amid a partisan stalemate, as Democrats push to expand access to the loans and for additional funding for hospitals, food assistance and aid for state and local governments. Senate Democrats last week blocked a $250 billion extension of the program.
As of Monday, the SBA had approved 10,898 loans in Arizona, totaling about $3.5 billion.
It is unknown how many Arizonans have applied for loans under the Paycheck Protection Program or how many are still waiting to hear back on their applications. Jordan Ripley, a spokesperson for the SBA’s Phoenix office, said the agency doesn’t have that information because applications go through the borrower’s bank, not through the SBA.
The application process has been fraught with frustration for many small business owners in Arizona who have hit various roadblocks as they apply for loans through their banks.
Businesses don’t have to pay back their loans from the Paycheck Protection Program if they use at least 75 percent of the money on payroll, rather than lay off their employees. For those who don’t hit that benchmark, the loans come with a 1-percent interest rate. The loans are available to businesses with fewer than 500 employees, and are available on a first-come-first-serve basis, sparking fears among small business owners that delays could leave them without economic relief.