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News May 11, 2021

PPP runs out of funds for most lenders

On May 4, the American Bankers Association announced the Paycheck Protection Program has run out of funds and its portal has stopped accepting applications for loans from most lenders, according to www.constructiondive.com.

Some of the money still is available through minority depository institutions and community development financial institutions, though the estimated amount varies slightly; the ABA gave a figure of about $8 billion, and the Independent Community Bankers Association said $9.9 billion remained.

The cutoff came nearly four weeks before PPP was scheduled to end. In March, lawmakers had extended the application deadline to May 31 and gave the SBA until June 30 to close pending PPP applications.

“After more than a year of operation and serving more than 8 million small businesses, funding for the bipartisan Paycheck Protection Program has been exhausted,” said SBA spokesperson Carol Wilkerson. “The SBA will continue funding outstanding approved PPP applications, but new qualifying applications will only be funded through Community Financial Institutions, financial lenders who serve underserved communities.”

After first launching in April 2020, the program relaunched in January and aimed at ensuring smaller lenders and businesses see the benefits of participating. Community development financial institutions and minority depository institutions received exclusive access to the portal days ahead of larger banks, and during a two-week period, the White House announced the SBA only would accept PPP applications from businesses with fewer than 20 employees.

A COVID-19 relief bill in December 2020 allocated $284 billion to the PPP; about $258.2 billion of that money had been assigned to borrowers as of May 2. Since April 2020, the program has facilitated almost 10.8 million loans worth $780.5 billion.

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