NEW YORK — The government’s paycheck protection loan program for small businesses is on hold. The Small Business Administration said Thursday that it reached the $349 billion lending limit for the program.
Thousands of small business owners whose loans have not yet been processed must now wait for Congress to approve a Trump administration request for another $250 billion for the program. Lawmakers have been haggling over whether to extend the program as it stands now, or whether to add provisions that among other things would help minority businesses. It’s unclear when they might reach an agreement that would allow loan approvals to continue
Treasury Secretary Steven Mnuchin and SBA head Jovita Carranza on Wednesday urged Congress to approve more funds. Meanwhile, thousands of businesses are still applying, hoping to get loans when Congress approves an extension of the program. Democrats blocked a fast-track bid to pass the funding last week.
Senate Minority Leader Chuck Schumer and Secretary Mnuchin spoke Wednesday morning about legislation to shore up a paycheck subsidy program that has nearly reached its $349 billion lending limit. House and Senate Democratic aides spoke by phone with Treasury officials later in the day about Democratic demands for additional money for hospitals and state and local governments.
Reaching a deal won’t be easy. The Capitol is largely shuttered, requiring consensus from all sides for any legislation to pass, and top GOP leaders are vowing to stick closely to Trump’s request despite Democratic demands. Long-standing feuds and rivalries hang over the talks, including a toxic relationship between House Speaker Nancy Pelosi and Trump.
Majority Leader Mitch McConnell, R-Ky., issued a joint statement with top House Republican Kevin McCarthy of California urging quick funding for the paycheck program. The Senate is away from Washington through May 4, though it convenes twice each week for pro forma sessions that could be used to pass more coronavirus aid — though only if no senator objects.
Republicans amped up the pressure for a “clean” extension of the paycheck program in statements Wednesday night. House GOP Whip Steve Scalise said Democrats “need to stop holding small businesses and workers across America hostage to their endless spending demands.”
With leaders unable to readily summon lawmakers to Washington, the usual power dynamics are scrambled, especially in the House. There, Minority Leader McCarthy, for example, can stymie legislation more easily than if members are present, and Pelosi, D-Calif., cannot rule the House with her typical tight grip.
“Tell Chuck Schumer and Nancy Pelosi to STOP blocking critical funding for small businesses. The Paycheck Protection Program is about to run out of money — millions of jobs are hanging in the balance. Congress MUST ACT!” McCarthy wrote Tuesday on Twitter.
In a statement Wednesday, the North Carolina Bankers Association echoed McCarthy’s call, urging small business owners to contact their members of Congress to support the additional program funding.
“North Carolina banks stood by their small business customers well before the Paycheck Protection Program (PPP) was created by the CARES Act, and will continue to stand by them now as PPP funding nears depletion. Banks will continue to work closely with small businesses to tailor financial solutions for their individual situations,” said NCBA President & Chief Executive Officer Peter Gwaltney.
NCBA officials say that within 10 days of the Paycheck Protection Program launch, North Carolina banks made 23,786 PPP loans to North Carolina small businesses, totaling more than $5.7 billion.