On Tuesday, April 7, the Administration requested another $250 billion for the Small Business Loans that just opened a little more than a week ago. The forgiveness loans are open to small businesses of less than 500 employees. SBA loans are available to nonprofit organizations. There has been significant confusion and even frustration as loan applications have been backlogged due to overwhelming demand and confusion on the parts of some lenders regarding the process and their obligations. The initial funding for the SBA Paycheck Protection Program loans is $350 billion. It provides partially forgivable loans to small businesses and some non-profits that continue to meet certain employment levels beyond the coronavirus crisis.
The Administration’s letter to the Senate from last Tuesday stated, “As of today, the Small Business Administration (SBA) has recorded over 220,000 loans totaling approximately $66 billion. Given the level of demand for the program, the Administration believes the funds appropriated for this program will soon be exhausted.”
Senator Mitch McConnell (R-KY) initially said he would seek to pass it through the Senate on Thursday through a procedural vote that would require all 100 senators not to object. The initial announcement by the Senate Majority Leader came without coordination with the other party or the House that is key to any quick passage.
The Democratic leadership released statements supported the increase but want additional measures in the next package. A joint statement by Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Charles Schumer (D-NY) said they wanted, “$250 billion in assistance to small businesses, with $125 billion channeled through community-based financial institutions that serve farmers, family, women, minority and veteran-owned small businesses and nonprofits in rural, tribal, suburban and urban communities across our country, and improvements to ensure all eligible small businesses can access this critical funding and are not turned away by banks.”
In addition, they said the package must include “$100 billion for hospitals, community health centers, and health systems, providing desperately needed resources to the frontlines of this crisis, including production and distribution of national rapid testing and Personal Protective Equipment (PPE); $150 billion for state and local governments to manage this crisis and mitigate lost revenue, doubling down on the investment secured in the CARES Act; and strong additional support for families with a 15 percent increase to the maximum SNAP benefit to help put food on the table.”
Within 12 hours of the program’s start on Friday, April 3, the Small Business Administration reported that some 17,500 loans valued at $5.4 billion were approved. The acknowledgment from all sides appears to be that the initial $350 billion will not be enough to cover all the small businesses and nonprofits that will apply and will need the help. McConnell did not get the unanimous consent or “U.C.,” but if he had, it would have required House members to return for a full vote if anyone objected.
What results is a likely fourth package costing more than a trillion dollars or possibly a two-part package that would include the $250 billion for SBA loans plus many additional items. CWLA is developing a series of recommendations targeting federal matching funds for Title IV-E, more Title IV-B funding for child welfare services, CAPTA, tribal funds, Chaffee Independent funding, and increases for SSBG and TANF.