The well has run dry.
The Treasury Department and Small Business Association’s Paycheck Protection Program is out of money, according to a message posted on the SBA’s site. The U.S. government had allotted an initial $349 billion pool in emergency loans for small businesses battered by the coronavirus pandemic. But Democratic and Republican lawmakers have yet to reach a deal to replenish the now-empty pot.
“The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding,” the SBA wrote. “Similarly, we are unable to enroll new PPP lenders at this time.”
The PPP, which guarantees loans to companies and nonprofits with fewer than 500 employees, was one component of the federal government’s $2.2 trillion CARES Act, passed in late March. The act included numerous components meant to protect American jobs and inject money into the economy, such as stimulus checks for citizens, expanded unemployment benefits and mortgage deferrals for individuals and landlords.
While lawmakers are at odds on next steps, elected officials on both sides of the aisle — and economic experts — are in agreement that further steps are needed to prevent a Great Depression.
Treasury Secretary Steven Mnuchin and Democratic legislators are meeting Thursday in hopes of agreeing on a package to increase funding for the Small Business Association. The Senate is to meet for a pro forma session at 3 p.m. ET, and a deal needs to be reached prior to then in order for more funds to be allocated this week.
Where the footwear industry is concerned, Footwear Distributors and Retailers of America president and CEO Matt Priest said this week that shoe companies need immediate government action to stem the bleeding of cash.
“What we would like to see in the near term is something that doesn’t even need legislation — it’s a holiday on duty payments on imports from China,” he told FN.
According to the FDRA, footwear companies paid $3.3 billion in footwear duties in 2019. Another boon to shoe companies, Priest said, would be more protections for retail tenants, giving them some flexibility on rent payments.
More Than Half of US Retail Space Is Closed — What That Means for the Economy