The Paycheck Protection Program has officially "run out of money", hopefully putting an end to what was likely one of the most abused and poorly watched over government cash troughs ever created.
The program has run out of money before its planned May 31 end date, the Small Business Administration said, according to CNBC.
The program will only accept new applications from community financial institutions, which "which typically serve minority borrowers", the report said. The SBA will fund outstanding approved applications (like Ross Gerber's?) but won't accept new applicants.
The announcement comes weeks after the PPP was extended through the end of May. It's almost as if when you're handing out free money, there's going to be lots of demand.
Sam Sidhu, vice chairman and chief operating officer at Customers Bank, a subsidiary of West Reading, Pennsylvania-based Customers Bancorp, told CNBC: “We did get caught off guard a little bit.”
The bank was processing about 20,000 PPP loans per week and still has "thousands" in the application process.
Chris Hurn, chief executive of Fountainhead Commercial Capital, noted he had a backlog of more than 60,000 applications pending validation. “Everybody’s going to be waiting now to see what the SBA does, if anything,” he commented.
Congress had set aside roughly $292 billion for a new round of the program this year, allowing some businesses to apply for a second round of loans. In addition, the SBA has reopened applications for the $16 billion Shuttered Venue Operators Grant Program and the SBA's Restaurant Revitalization Fund.
The PPP program has now been around since March 2020 and has given more than $780 billion in forgivable loans to more than 10.7 borrowers.
But don't worry, we're sure none of that money is going to make its way into consumer prices...