Updated Apr 16, 2020 - Economy & Business

Small business loan fund from coronavirus stimulus runs out

A deserted downtown in Rockton, Illinois. Photo: Scott Olson/Getty Images

The $349 billion cap for small business loans for the coronavirus stimulus was reached Thursday, taking less than two weeks to run out.

Why it matters: While it's a sign that more than 1.6 million small businesses (and some larger ones) will eventually get desperately needed cash, it's now officially a sign that more is needed.

  • Paycheck Protection Program (PPP) loans are forgivable if used for payroll and rent and similar expenses, and they're designed to keep otherwise healthy businesses afloat during this crisis.

The big picture: In roughly a month, coronavirus lockdowns have...

  1. Caused more than 1 in 10 working-age Americans to file for unemployment.
  2. Put historic pressure on businesses not initially affected by the lockdown, with a second wave of layoffs hitting nationwide. (WSJ)

The state of play, via Axios' Alayna Treene: Democrats and Republicans are still in a stalemate over how big an interim stimulus package should be — with both sides digging in deeper to their respective positions last night.

  • Republicans continue to argue that the most urgent need is to add money to the PPP, and that they can negotiate other funding measures once that’s passed.
  • Meanwhile, Democrats are insisting that the bill should include money for hospitals and state and local governments, citing mayors and governors who have pleaded for more federal aid.

What's next: House and Senate aides familiar with the talks say now that the fund is depleted, the pressure to come to a compromise is greater than ever to deliver emergency funding, and are confident they will reach an agreement soon. 

  • Some Trump administration officials say they’d be open to accepting more money for hospitals in order to get the $251 billion in small-business funding they've requested.
  • Treasury Secretary Steven Mnuchin and members of his staff are scheduled to resume talks with Senate Democratic and House majority leadership today to try and hammer out an agreement.

Go deeper

Cities' budget woes worsen with increased social unrest

Illustration: Sarah Grillo/Axios

Cities were already furloughing workers and considering cutting back essential services — including public safety — because of the dramatic drops in the local tax revenue that funds them. Now they're also dealing with turmoil in their streets.

Why it matters: "Unfortunately, the increasing levels of social unrest across the country reallocated efforts and scarce resources away from the former focus of getting state, regional and local economies back to some semblance of normalcy," per Tom Kozlik, head of municipal strategy and credit at HilltopSecurities.

Updated Jun 4, 2020 - Health

U.S. coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

The Department of Health and Human Services moved on Thursday to require that an individual's race, ethnicity, age and sex be submitted to the agency with novel coronavirus test results.

Why it matters: Some cities and states have reported the virus is killing black people at disproportionately high rates. There are gaps in the national picture of how many people of color are affected, since the data has not been a requirement for states to collect or disclose.

Senate passes bill to ease PPP loan restrictions

Illustration: Sarah Grillo/Axios

The Senate unanimously passed a bill on Wednesday to loosen some of the rules that small businesses must follow when applying for Paycheck Protection Program loans.

By the numbers: Businesses now have 24 weeks to use loans obtained through the program, instead of eight weeks. Only 60% of a PPP loan now has to be used for payroll, instead of 75% — a requirement that "tens of thousands of borrowers" weren't expected to meet, per a recent inspector general report.