Data from the Small Business Administration shows net weekly PPP lending has actually been negative since mid-May, as fewer firms applied for loans, and some borrowers returned funds, Reuters reported. All told, the SBA says that it had approved $512.2 billion in PPP loans as of May 21. That’s nearly $150 billion less than the $660 billion allocated to the program, which was designed to keep Americans on company payrolls and off unemployment assistance. Business owners first saw the program as a lifeline during the coronavirus crisis. They are now worried that confusing and changing rules may keep them from converting the money to a grant, meaning they will need to pay it back. To ensure forgiveness, for instance, firms need to spend three-quarters of the funds on payroll. But for some firms that doesn’t leave enough to cover overhead. Others don’t have enough work to justify rehiring many of their pre-crisis staff. A survey by small business lobbying group Main Street Alliance showed 55 percent of members who were PPP borrowers were worried about loan forgiveness. Potential borrowers are “uncertain when we are going to reopen, uncertain what the demand will look like, uncertain about use of the program funds,” said Bill Keller, president of Oakland-based Community Bank of the Bay. Another barrier to PPP use is competing stimulus programs. Workers who lose their jobs due to the virus get an extra $600 weekly through July as part of enhanced unemployment benefits passed in March, netting many service workers more than if they returned to a PPP-subsidized job.
