The two key federal programs to support small businesses through the coronavirus crisis, the Payroll Protection Plan and Economic Injury Disaster Loans (see “CARES Act Improves Options for Retailers, Other Small Businesses”), have both run out of money as of today. The most popular, the Payroll Protection Program via the CARES Act, was funded for $350 billion in late March. SBA loan applications for the PPP were handled by banks, and the program provided forgiveness for loans to small businesses if the proceeds were spent on payroll, rent, and utilities in the eight weeks following the loan origination. That initial $350 billion was exhausted by late yesterday, and the Small Business Administration is no longer accepting applications.
The roll-out of the PPP program was rocky, as banks only received information from the SBA on rules for the program hours before they were to begin taking applications. And massive demand crashed bank websites, made customer support for questions often unavailable, and ultimately far outstripped not only the ability of banks to handle the process, but the funds available for the program.
Qualifications for Economic Injury Disaster Loans, also administered by the SBA, were loosened for businesses affected by the Covid-19 coronavirus, and enhanced to allow for quick grants of $10,000 that did not have to be repaid. As of today, the SBA website informs applicants that funds have been exhausted. Only $17 billion was appropriated for that program (via two bills, including the CARES Act), and small businesses applied for $372 billion in loans, according to Maryland Senator Ben Cardin. Businesses approved for loans often only got a small fraction of their requests, and with significant delays, according to the New York Times.
The needs are obviously acute, especially for comic and game stores, which are not regarded as essential businesses and have been shut down in almost all states. Additional funds, if any, will have to come through Congress and be signed into law by the President, at which time the desperate rush for help would begin again.