By JOYCE M. ROSENBERG AP Business Writer
NEW YORK (AP) – The government’s main COVID-19 relief program for small businesses is strapped for cash.
The Small Business Administration said Wednesday the paycheck protection program has run out. As of Sunday, the PPP had granted nearly 10.8 million loans worth more than $ 780 billion since April last year.
The program, which was cash-strapped and reimbursed by Congress twice previously, was due to expire on May 31. It is not yet clear whether lawmakers will approve another round of funding.
The SBA said in a statement that it will continue to fund the applications that have been approved. New applications submitted through community financial institutions, which are financial lenders serving underserved communities, would also be funded.
More than half of the loans and almost a third of the loan money have been distributed this year. The average loan size was $ 46,000, less than half of the average loan size of $ 101,000 in 2020. This is a sign that small businesses that could not get loans last year were now getting financing. Businesses were drawn to loans because they promised a rebate if the money was used for payroll and other essentials.
But, while the PPP has helped save many businesses devastated by the pandemic, the Biden administration has estimated that more than 400,000 U.S. businesses have closed their doors permanently due to the virus.