Small businesses that missed out on the first round of loans under the federal Paycheck Protection Program can apply for a new round of the pandemic-related emergency loans starting Monday.
Applications for the $310 billion second round, which Congress approved this week after an initial $349 billion fund was quickly exhausted, will be accepted by participating lenders starting at 7:30 a.m. Monday, the Small Business Administration announced Friday.
“Our economy is dependent on the small businesses, so we need to and are doing everything in our power to ensure that they make it through the impact of this horrible pandemic,” said Jeremy Field, regional administrator for the SBA Pacific Northwest Region, in a news briefing Friday.
The loan program, created under last month’s $2.2 trillion pandemic response as a way to avoid layoffs, has been praised by some as a lifeline for small businesses, which needn’t repay the loans if they’re used primarily to retain or rehire employees. In Washington, the SBA oversaw 30,421 loans totaling $6.96 billion before the program ran out of funds last week.
But the program also has been criticized for underestimating the amount of money needed by small businesses during the pandemic, and for not making loans more accessible to smaller businesses. Some small business owners in Seattle say they were either unable to apply for loans or were not approved before the funding ran out.
Critics also say the program favored larger firms, as well as those in sectors relatively untouched by layoffs. According to the Wall Street Journals, SBA loans of $1 million or more represented just 4% of all applications, but accounted for nearly half of the money lent out — a pattern that indicated “larger companies received a disproportionate share of aid,” said the Times.
An analysis by the Urban Institute found that the accommodations and food industry, which accounted for nearly two-thirds of the job losses in March, received just 9% of the program’s funds, while the professional, scientific, and technical services sector, which saw an increase of 7,500 jobs during that time, got 12.3% of the program funds — the second largest share, behind only construction.
Field pointed out that $60 billion of the new funds are earmarked for “community-based and small lenders.” The SBA is also working with chambers of commerce and other local business organizations to help small business access funds under the program, which even critics have acknowledged is one of the largest and most ambitious relief efforts in U.S. history. As Field himself noted, “this is a marathon that we’re running at a sprinter’s pace.”