The Federal Reserve’s $349-billion Paycheck Protection Program, or PPP, which was designed to lend money to small businesses to fund their payrolls during the economic crisis, saw its funding claimed within minutes of applications becoming available.
The Bank of America, which manages a portion of PPP money on behalf of the Federal Reserve, received over 10,000 applications on the first day the applications were available. “We didn’t even get through the first five minutes” before the amounts applied for exceeded the bank’s share of available funds, said a bank executive.
In all, the bank received more than 60,000 applications.
By the end of 15 April, the program had allotted more than $315 billion to more than 1.7 million applicants.
Economists had estimated the program needed $1 trillion to meet small businesses’ demand for the help – about three times the amount funded.
At this writing, Congress is negotiating another round of program funding, said to be more than $250 billion.
Democrats have festooned the new measure with plans to increase the budget for food stamps and for aid to state and local governments, among other steps, in addition to new payroll loans for small businesses.
Republicans have balked, wanting to speed the aid to businesses and debate other issues separately.
Early tallies show the manufacturing and construction industry gathered about 14 percent of early allotments, the largest share. Hotels and restaurants, which have laid off far more people, received less than 10 percent.
The loans were first come, first served, so those who applied soonest got the money.
TREND FORECAST: Considering the scope and depth of the national lockdown, of those businesses, particularly in the restaurant, travel, and hospitality sectors that do survive, most will experience negative to slow growth for years to come.
