BILLIONS OF DOLLARS FOR SMALL BUSINESSES STILL UNCLAIMED
Billions of dollars offered by Congress as a lifeline to small businesses struggling to survive the pandemic are about to be left on the table when a key government program stops accepting applications for loans, Joyce M. Rosenberg wrote for the Associated Press (AP) on June 29, 2020.
Business owners and advocacy groups complain that the money in the Paycheck Protection Program was not fully put to work because the program created obstacles that stopped countless small businesses from applying. For those that did seek loans, the ever-changing application process proved to be an exercise in futility. “It was a flawed structure to begin with,” said John Arensmeyer, CEO of Small Business Majority, an advocacy group. “It favored established businesses. It was set up to give money to people with strong banking relationships.”
The program’s shortcomings also made it more difficult for minority businesses to get loans, according to a report from the Center for Responsible Lending, a research group. The loans were designed to give companies devastated by government-ordered shutdowns money to pay staffers and survive. The money was aimed at small businesses such as restaurants, retailers and salons that are desperately trying to stay afloat as the US economy opens in fits and starts. As of late Friday, the Small Business Administration had approved more than 4.7 million loans worth nearly $518 billion. Small businesses that also included medical offices, dry cleaners and manufacturers obtained money that ultimately saved jobs and eased the unemployment rate from April’s staggering 14.7% to May’s still-excruciating 13.3%.
But more than $140 billion in loan money remained unclaimed out of $659 billion allocated by Congress. It will be up to Congress to decide what to do with any leftover funds, an SBA spokeswoman said.