Treasury Secretary Steven Mnuchin said if the $350 billion in loan funds for small and medium-sized businesses (SMBs) runs dry, he will go back to Congress and ask for more money, according to a Wednesday (April 1) CNBC report.
“One of the things I’ve heard is this small business program is going to be so popular that we’re going to run out of our $350 billion,” he told CNBC. “If that’s the case, I can assure you that will be top of the list for me to go back to Congress on. It has huge bipartisan support and we want to protect small business.”
Some lawmakers have already called for a fourth stimulus bill following the passage last week of a historic $2 trillion coronavirus relief package. The stimulus money will assist households and businesses that have taken a financial hit due to the coronavirus pandemic. Jobless claims hit a record 3.3 million.
The $350 billion SMB loan funding is for businesses with less than 500 employees and is part of the total $2 trillion stimulus package. Called the Paycheck Protection Program, the loans are intended to incentivize SMBs to keep paying workers.
SMB loans will be forgiven if the business uses the money to pay employees, mortgage interest or utilities. Sole proprietorships, independent contractors and those who are self-employed can all apply for loans.
The loans will be handled by the Small Business Administration (SBA) using approved lenders and application processing is anticipated to begin on Friday (April 3), according to the SBA.
Banks stand to make billions from the $350 billion coronavirus bailout package. Lenders will reap the benefits of processing fees — 5 percent for loans under $350,000, 3 percent for loans under $2 million, and 1 percent for loans greater than $2 million. The fees will be covered by the federal government.
Businesses can take out loans up to $10 million that are equal to 2.5 times their average monthly payroll.