A handful of government-run loan programs at the state and federal levels, meant to help businesses hit hard by the COVID-19 global pandemic, are turning away new applicants as demand far outstrips the supply of available funds.
On the state level, officials at the New Jersey Economic Development Authority said they are closing applications at noon for aid from its $10 million small business loan program. And at the federal level, the U.S. Small Business Administration is closing applications for its $349 billion loan program – known as the Payment Protection Program – after more than one million nationwide applicants sought the combined of the entire allotment.
The Economic Injury Disaster Loan Program, which is run in coordination with private financial institutions, also closed its applications today.
“The SBA has processed more than 14 years’ worth of loans in less than 14 days,” reads a joint Thursday statement from U.S. Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza.
“By law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations,” the statement continues. “We urge Congress to appropriate additional funds for the Paycheck Protection Program—a critical and overwhelmingly bipartisan program—at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks.”
Applications already submitted to the SBA will still be processed, according to the federal agency.
As of Wednesday morning, there were 2,858 loan applications seeking a combined $205 million from the EDA’s Small Business Emergency Loan Assistance Program, according to Virginia Pellerin, a spokesman for the agency.
Applications first opened at 9 a.m. on Monday, and the EDA reached its $10 million limit less than half an hour later. Last week, a $5 million EDA grant program maxed out on the amount of aid money available just over an hour after the applications went live.
Tim Sullivan, chief executive officer of the EDA, said that new money for the program would need to come from an outside source: Either philanthropic, private or federal.
Businesses vying for these state and federal dollars have been ordered to shutter their windows, or seen a steep decline in revenue as millions of Americans opt to stay at home, or tighten their belts as they find themselves out of work.
Editor’s note: A previous version of this story incorrectly paraphrased NJEDA chief executive Tim Sullivan’s comments regarding additional funding for the organization’s assistance programs as having to come from the state, with assistance from the federal government; Sullivan actually said that the funding would need to come from an outside source, be it philanthropic, private or federal. The post was updated at 10:02 a.m. EST on April 17, 2020.d