The small business loans program is basically out of cash. What’s next?
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One of the key programs created by Congress to help small businesses and their workers get through this crisis is almost out of cash. The $350 billion Paycheck Protection Program has processed more than 1.6 million loans so far.
These are loans aimed at keeping workers on the payroll that are forgivable — so they become grants if a business meets the criteria. And members of Congress are at odds about how to get more aid to businesses.
Marketplace’s Amy Scott shared the details with “Marketplace Morning Report” host David Brancaccio. The following is an edited transcript of their conversation.
David Brancaccio: First, where’d the money flow?
Amy Scott: Construction, professional and technical services and manufacturing industries have received the biggest share of money, more than $30 billion each. There are concerns that some of the hardest hit businesses like restaurants and hotels aren’t getting enough help. The geographic differences break down as follows: Texas and California, the two biggest states by population, have seen the most money. But New York, especially hard hit by the virus, came in fourth, behind Illinois.
Most loans have been $150,000 or less, but that goes fast. The Small Business Administration says it’s processed “more than 14 years’ worth of loans in less than 14 days.”
Brancaccio: What is Congress going to do now that this pot has essentially been depleted?
Scott: There is bipartisan agreement that there should be more money. Republicans want another $250 billion for the program, but Democrats want more strings attached, like specific help for women- and minority-owned businesses Also, there’s the problem of actually passing anything, with Congress working from home right now and unlikely to come back to Washington until next month.
COVID-19 Economy FAQs
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
Are people still waiting for unemployment payments?
Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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