WASHINGTON–A federal relief fund that was expected to quickly exhaust its nearly $310 billion in emergency help still has approximately $130 billion left, according to new data.
The federal government said the second round of the Paycheck Protection Program, which was quickly OK’d by Congress after the initial $349 billion in the first phase of the PPP was depleted, has plenty of money left to handle additional applications. But many small businesses are wary of applying, according to one new analysis.
“Even more striking was the fact that on many days last month, more money was being returned than borrowed, according to data from the Small Business Administration, which is overseeing the program — highlighting its messy execution and confusing rules that deterred some small businesses from using the money,” reported the New York Times.
The Times noted thousands of companies that got loans have sent the money back, according to lenders, with some business owners saying the program’s terms were too restrictive, while others found the criteria for loan forgiveness was too murky.
During testimony on Wednesday before the Senate, Treasury Secretary Steven Mnuchin said approximately $12 billion has been returned.
What Data Show
Overall, the amount of loans outstanding under the program dropped to $510.2 billion at the end of May, from $513.3 billion in the middle of the month, according to SBA data, the Times reported.
“That meant about $3 billion had been canceled or returned, including at least $550 million from public companies. By (June 8), the amount of approved loans had inched back up to $511.5 billion — indicating that changes Congress made to the program last week to make it less restrictive could be pushing more money out the door,” the Times noted.
As CUToday.info reported earlier, Congress has moved to loosen the program’s rules and give businesses more flexibility in spending their aid.
“The amended rules could help the remaining $130 billion move faster. However, having the terms of their loans revised on the fly yet again — which has happened repeatedly since the program began in April — is a nightmare for borrowers as they struggle to salvage their companies,” the Times report stated.
‘Like a Video Game’
One business owner said of the program, “the boundaries move like a video game.”
The Times report included interviews with a number of small business owners who said they had returned money out of fear they would be “financially ruined” if the loans were not forgiven.