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Paycheck Protection Program stops accepting new applications as funding runs out

Officials say some money has been set aside for community financial institutions

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Photo (c) hapabapa - Getty Images
Now that the money available through the government’s Paycheck Protection Program (PPP) has largely been tapped, the program is coming to a close four weeks ahead of its scheduled end date. 

The PPP -- a program created last year to help small businesses weather the pandemic -- ran out of general funding on Tuesday afternoon. The Small Business Association, which runs the program, said Tuesday that most new applications are no longer being accepted. Applications were originally supposed to stop being accepted on May 31. 

Some lenders will still be able to process pending applications if the applicant is part of a struggling community financial institution. The SBA said around $8 billion remains in funding for these establishments, which are typically run by women, minorities, and other underserved communities. 

The National Association of Government Guaranteed Lenders wrote in an alert to its members that although the general fund is closed to new applications, lenders assisting community financial institutions will still be allowed to process applications until that money is depleted. Applications that are currently “pending” can also finish being processed, the trade group said. 

Over the past year, around $780 billion in forgivable loans have been given under the PPP to small businesses that were hard-hit by the pandemic. Congress isn’t likely to add new money to the fund since vaccination rates are on the rise and restrictions are easing -- or, in some parts of the country, ending altogether.

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