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The Small Business Administration said on Tuesday that roughly 60,000 borrowers were approved for more than $5 billion in forgivable loans during the first week of the reopened Paycheck Protection Program, the Wall Street Journal reported. The small-business coronavirus relief effort relaunched Jan. 11 after closing last August. The first wave of applications was largely handled by community and small lenders after the SBA set aside time for them to process the loans exclusively. The program’s restart comes as many small businesses continue to struggle with the fallout from the pandemic. One-third of small businesses surveyed between Jan. 4 and Jan. 10 said they would need financial assistance or additional capital in the next six months, according to the Census Bureau, up from nearly 25% in mid-November. The average PPP loan size was below $20,000 for first-time borrowers and below $75,000 for second-time borrowers for applications processed through Jan. 17, according to an SBA spokesman, a sign the loans were being approved for smaller businesses. Loan amounts are based on the size of an applicant’s payroll. The average loan size was $206,000 during the program’s initial launch last April and was $101,000 at the program’s close last August.

The U.S. government is pressuring large lenders to go live this week with another round of a key federal pandemic loan program despite many unresolved issues, sparking an industry scramble to get lending platforms ready, Reuters reported. The Paycheck Protection Program (PPP) reopens to large lenders on Tuesday, with many big banks, including JPMorgan Chase & Co, Wells Fargo & Co and Bank of America, ready to start accepting applications, their representatives said. But with dozens of changes to the rules and government technology system, the latest round is much more complex. Some industry executives worry that the government pressure to launch with so many unresolved issues could cause a rerun of the paperwork and technology snags that dogged last year’s launch. While the program helped millions of small businesses, last year’s problems contributed toward some needy borrowers missing out while some ineligible companies and fraudsters got funds, oversight watchdogs have said. A spokesman for the Small Business Administration (SBA), which jointly administers the PPP with the Treasury Department, said Congress expected the latest round to be launched swiftly to get cash to needy businesses as quickly as possible.

President-elect Joe Biden yesterday outlined his $1.9 trillion stimulus proposal and called for swift action on it, warning that the health of the nation and its economy hang in the balance, The Hill reported. Speaking six days before he will be inaugurated as the 46th president of the United States, Biden laid out a plan that would support coronavirus vaccination efforts, help reopen schools, deliver critical aid to workers and small businesses, tackle the hunger crisis and send funding to state and local governments. He said that his plan would be two-pronged. The first element is the “American Rescue Plan” the president-elect is asking Congress to pass immediately. The second is a forthcoming recovery package that he plans to lay out in February that will involve investments in infrastructure, research and development and clean energy. Biden said that he plans to describe his recovery package during an address to a joint session of Congress in February. Biden is proposing a $1.9 trillion relief package that includes $415 billion focused on combating the COVID-19 pandemic, over $1 trillion in direct aid to individuals and families and $440 billion in assistance to businesses. The plan includes funding for $1,400 in additional stimulus checks to Americans who qualify for them, adding to $600 checks already enacted in December; an extension for key unemployment programs from mid-March to the end of September; and an increase in weekly additional unemployment assistance from $300 to $400. The proposal also calls for increasing the federal minimum wage to $15 an hour over time. The proposal also sets aside $20 billion for a national vaccination program and $50 billion to scale up coronavirus testing.

Massachusetts is highlighting efforts to help small businesses survive the economic turmoil they have suffered because of the coronavirus pandemic, the Associated Press reported. This week, nearly 1,600 businesses received grants totaling $78.6 million through a state COVID-19 business grant program. It’s the third round of grants to be awarded since Dec. 21, Gov. Charlie Baker said at a news conference yesterday. So far, the administration has awarded close to $195 million in direct financial support to more than 4,100 small businesses out of a $668 million fund set up to support small businesses across the state. The help is targeted at businesses hit hardest by the pandemic, including restaurants, small retailers, and indoor entertainment venues, Baker said. The remaining money will likely go to tens of thousands of businesses in the coming weeks, Baker said. Grants of up to $75,000 are still available, he added. “The program we’re operating is the largest small business grant program using COVID relief funds currently in the United States,” the Republican said. Applications for the next round of grants are due by 11:59 p.m. Friday.

President-elect Joe Biden will unveil a stimulus package proposal today designed to jump-start the economy during the coronavirus pandemic with an economic lifeline that could exceed $1.5 trillion and help minority communities, Reuters reported. Biden campaigned last year on a promise to take the pandemic more seriously than President Donald Trump, and the package aims to put that pledge into action with an influx of resources for the coronavirus vaccine rollout and economic recovery. The incoming administration will work with Congress on the quick stimulus package after Biden takes office on Jan. 20, although the impeachment of Trump threatens to consume lawmakers in the initial weeks. The stimulus package has a price tag above $1.5 trillion and includes a commitment for $1,400 stimulus checks, according to a source familiar with the proposal, and Biden is expected to commit to partner with private companies to increase the number of Americans getting vaccinated. Biden’s incoming White House economic adviser, Brian Deese, told Reuters on Wednesday the president-elect would press Congress to pass immediate stimulus measures and then turn to longer-term economic recovery measures related to healthcare and infrastructure.

The Paycheck Protection Program was a lifeline for millions of small businesses brutalized by the pandemic. Over a four-month span, the government program distributed $523 billion in forgivable loans to more than five million companies. The average recipient got just over $100,000. And then there were the roughly 300 business that received loans of $99 or less, the New York Times reported. Judith Less, who runs a thrift shop in New Jersey, got $27. Nikki Smith, a baker and caterer in Oregon, collected $96. A.J. Burton, the founder of a record label in Arkansas, got $78. And Susana Dommar, a chiropractor in Texas, received a loan for just $1. Stephanie Ackerman, a self-employed college admissions consultant, was shocked when her loan deposit, for $13, showed up in her bank account. “That’s supposed to help my business? It was a joke,” said Ackerman, whose company, Tomorrow Today College Consulting in Red Bank, N.J., lost months of sales last spring as the coronavirus crisis took hold. The tiny sums were equally frustrating for the banks and other lenders that made the government-backed loans. For each, they were paid 5 percent of the value — meaning they collected just pennies on the smallest loans, far less than they cost to make. Ms. Ackerman’s loan netted her lender, Bank of America, a fee of 65 cents, paid by the government.

While 2020 was the year when COVID-19 hit home, 2021 is expected to be the year when the economy and everyday life returns to normal, more or less. That should bring more jobs, higher incomes and less financial stress generally. But the new year also will mark a time when millions of Americans continue to grapple with the financial fallout from the pandemic, the Arizona Republic reported. Improvement won't come overnight, and some problems — tax payments, debts and saving deficits — could get worse before they get better. Some 53% of Americans said they were worried about tax debt in 2021 including 76% who lost work during the pandemic, according to a survey released in December by LendEDU. Top reasons for concern included taxable withdrawals from retirement plans, taxes that resulted from selling stocks or other assets, and taxes on jobless benefits. About 10% of respondents said they weren’t able to file and pay all of their 2019 tax obligations by the extended July 15, 2020, deadline. A wave of bankruptcy filings did not happen in 2020, thanks largely to expanded jobless benefits, stimulus payments, Paycheck Protection Program business loans, foreclosure moratoriums, landlord forbearance and other help. In fact, consumer bankruptcy filings last year ebbed to their lowest level since 1987, according to the American Bankruptcy Institute. Total filings, including for businesses, fell 30 percent last year. Many consumers and businesses have been "sitting on the edge," waiting to see if conditions improve this year before they file for bankruptcy, said Amy Quackenboss, executive director of the American Bankruptcy Institute. "They're waiting to see if things get back to normal." Some individuals might dig out of their holes, especially if jobs return big time to industries such as lodging and restaurants as the economy recovers and lockdowns ease. But many businesses, already suffering, might not make it, which could lead to permanent job losses, Quackenboss said. Business bankruptcies already are rising. Quackenboss said she expects consumer filings also will increase, at least back to 2019 levels, in the coming year. However, she added that it's difficult to predict the timing as so much depends on efforts to suppress the virus and the length that federal and other assistance programs stay in place.

The U.S. government today is set to re-open its signature small business pandemic aid program with $284 billion in new funds and revamped rules that aim to get cash to the most needy businesses while stamping out fraud and abuse, Reuters reported. The Small Business Administration (SBA) announced on Friday that it would launch a third round of the Paycheck Protection Program (PPP) this week, starting with small community financial institutions on Monday, and larger lenders in coming days. By prioritizing smaller lenders, the SBA hopes to address criticism from lawmakers that minority and women-owned businesses did not get enough money during the first two PPP rounds last year compared with bigger businesses. Administration officials told reporters on Friday they expected the funds would be sufficient to meet demand. Under the program, lenders on behalf of the government distribute loans that can be forgiven provided the cash is spent on eligible costs, such as payroll and rent. To date, the PPP has distributed $525 billion through more than 5 million loans. Congress authorized the new funds last month as part of another pandemic stimulus package which also loosened PPP rules on who can get cash and what it can be spent on. Among the key changes, companies which took cash during the first two rounds will be allowed a second PPP loan provided they can show a 25% hit to their revenues. To address worries over fraud, the SBA is also introducing new due diligence checks. While lenders say the changes are positive, some are worried they may cause some initial snags, especially as the updated application forms and SBA rule guidance were only released on Friday.