Four weeks before its scheduled end, the federal governments signature aid effort for small business ravaged by the pandemic the Paycheck Protection Program ran out of funding on Wednesday afternoon and stopped accepting most new applications.
Congress allocated $292 billion to fund the programs most recent round of loans. Nearly all of that money has now been exhausted, the Small Business Administration, which runs the program, told lenders and their trade groups on Wednesday.
While many had predicted that the program would run out of funds before its May 31 application deadline, the exact timing came as a surprise to many lenders.
It is our understanding that lenders are now getting a message through the portal that loans cannot be originated, the National Association of Government Guaranteed Lenders, a trade group, wrote in an alert to its members Wednesday evening. The P.P.P. general fund is closed to new applications.
Some money around $8 billion is still available through a set-aside for community financial institutions, which generally focus on lending to businesses run by women, minorities and other underserved communities. Those lenders will be allowed to process applications until that money runs out, according to the trade groups alert.