SBA announces PPP is out of money for most borrowers
BIRMINGHAM, Ala. (WBRC) - The Small Business Administration made the announcement earlier this week that the Paycheck Protection Program will not accept new applicants.
The Paycheck Protection Program launched back in March of last year as part of the CARES Act designed to be a lifeline for millions of businesses struggling during the pandemic.
The U.S. Senate voted just a few weeks ago to extend the Paycheck Protection Program through the end of the month.
But those funds have dried up and some are wondering if they’ll still get paid.
“The SBA will only be accepting applications from those entities now that are called Certified Financial Institutions, and those are institutions that are set up with a specific purpose of outreach and support to underserved business owners,” said Deputy District Director for the Alabama SBA, LD Ralph.
He said there is still $9.9 billion set aside for business that fall under this category, but what about still waiting for payments?
“Those that have been submitted, but perhaps have not been disbursed yet…if it’s been reviewed and approved by SBA and have been issued an SBA loan number, then those are going to be the ones that will be approved. No new applications other than from the CDFIs will be accepted by the SBA,” Ralph explained.
Congress allocated $292 billion to fund the program’s most recent round of forgivable loans.
Senators were hoping the money would stretch until May 31st, but it ran out ahead of the deadline.
“Based on the volume that we received and how it kicked off in the first and second rounds, I’m actually a little bit surprised that the money lasted this long, based on how active the program was over the last year and the over 8 million borrowers across the country who have already received PPP loans,” Ralph said.
Analysts said that some banks were processing upwards of 20,000 PPP loans a week, and thousands of borrowers are still in the pipeline.
Ralph said there really is no specific timeline for when borrowers will get their money.
It all depends on the lender because they’re the ones who disburse the money.
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