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The $349 billion program to help small businesses reeling from the COVID-19  outbreak could be exhausted by Thursday, a top White House adviser said, but negotiations in Congress to replenish it remain stalled, Bloomberg News reported. “At the present run-rate, we’re going to be out of money,” Larry Kudlow, President Donald Trump’s chief economic adviser, said yesterday. As of mid-day yesterday, almost 1.1. million applications, totaling more than $257 billion, had been approved since the Small Business Administration program launched April 3. Trump and the GOP want to add another $250 billion to the Paycheck Protection Program, but Democrats have been holding out to expand the stimulus to include aid for state and local governments and hospitals. Despite the looming shortfall, there is no sign of negotiations between the administration and congressional leaders to break a deadlock over how to proceed. House Republican leader Kevin McCarthy (D-Calif.) on yesterday tweeted to his followers, asking them to pressure House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) to support the added funding for small business and drop their additional demands. Pelosi and Schumer back the small business program funding, but want changes that ensure the pool of lenders extends well beyond big banks. They also want an additional $250 billion in aid for state and local governments as well as for hospitals in whatever Congress does next.

Small businesses led by women, minorities or people from rural areas are looking for aid from the Small Business Administration’s Paycheck Protection Program aimed at helping smaller companies survive the fallout from the coronavirus pandemic. But getting a slice of the roughly $350 billion set aside under the PPP so far is a challenge for lenders, who are struggling to gear up as quickly as banks and other lending institutions with greater resources, the Wall Street Journal reported. “We didn’t get started as quickly as the others did, so we’re worried that by the time our program gets in place, that all of the funds for PPP would have been allocated,” said Matthew Raker executive director of Mountain BizWorks, a nonprofit loan fund focused on lending to small businesses that typically have trouble securing loans through traditional financial institutions. Democrats in Congress are looking to address that issue by setting aside roughly half of $250 billion in additional PPP funding for what are known as Community Development Financial Institutions such as Mountain BizWorks, along with other lenders such as credit unions and community banks. That effort has faced resistance from Republicans, leading the emergency-funding appropriation to stall last week. Sen. Marco Rubio (R-Fla.), who has helped spearhead the small-business relief efforts, said he favors expediting the current legislation and believes more community lenders should be encouraged to participate through other means. Democrats counter that community lenders, credit unions and other nonbank lenders serve small, fledgling businesses that are now at high risk of going under — and are typically underserved by traditional lenders.

Flooded by requests for help like never before, a federal disaster loan program that was supposed to deliver emergency relief to small businesses in just three days has run low on funding and nearly frozen up entirely. Now, business owners who applied are desperate for cash and answers about what aid, if any, they are going to receive, the New York Times reported. The initiative, known as the Economic Injury Disaster Loan program, is an expansion of an emergency system run by the Small Business Administration that has for years helped companies after natural disasters like hurricanes, floods and tornadoes. To speed billions of dollars in aid along, the government directly funds the loans, sparing applicants the step of finding a lender willing to work with them. But in the face of the pandemic, the loan program is drowning in requests. Many applicants have waited weeks for approval, with little to no information about where they stand, and others are being told they’ll get a fraction of what they expected. The program is supposed to offer loans of up to $2 million, but many recent applicants said the SBA help line had told them that loans would be capped at $15,000 per borrower. The CARES Act, the $2 trillion relief bill signed by President Trump last month, also authorized the SBA to hand out the first $10,000 as a grant that didn’t have to be paid back. Those funds were supposed to be available to applicants within three days of their application, even if they weren’t approved for a loan. That hasn’t happened, according to more than 400 applicants who contacted the Times.

Treasury Secretary Steven Mnuchin yesterday endorsed an optimistic prediction that the U.S. economy might reopen in May, even as more Americans die from COVID-19 and Federal Reserve Chair Jerome Powell warned against trying to return to normal too quickly, Politico reported. During an appearance on CNBC, host Jim Cramer asked Mnuchin if he believed there was a possibility, "if the doctors let us, that we could be open for business in the month of May." "I do, Jim," Mnuchin said. The comments from the Trump administration's top economic official come as other White House advisers press for commerce to resume quickly — an aim that appears to contradict more cautious messages coming from medical experts. Businesses across the country have closed their doors over the past month as the U.S. tried to slow the spread of the pandemic. White House economic adviser Larry Kudlow has also said he believes the economy can open sooner than many predict, telling Politico on Tuesday that it was possible "in the next four to eight weeks."

A new debate broke out on yesterday over the next infusion of federal dollars needed to bolster an economy battered by the coronavirus pandemic, as Democrats pressed to add money for hospitals and state and local governments to an emergency infusion of $250 billion requested by the Trump administration to help distressed small businesses, the New York Times reported. The counterproposal, put forward by Speaker Nancy Pelosi of California and Senator Chuck Schumer of New York, the minority leader, threatened to slow down the additional round of funds for a new loan program created by the $2 trillion stimulus package for small businesses, which the administration and Republicans had hoped to speed through Congress by the end of the week. “The bill that they put forth will not get unanimous support in the House,” Pelosi said. The debate is over an interim measure that lawmakers in both parties agree is necessary to reinforce the small-business loan program — which had a troubled rollout and has been inundated with requests from desperate companies — before Congress turns to a more sweeping bill it has begun referring to as “Phase Four” of the coronavirus aid efforts. But even the smaller, more immediate measure has created some friction. In a joint statement yesterday, the Democratic leaders said that they supported the administration’s request for an additional $250 billion for the loan program. But they said $125 billion of that should be directed to underserved businesses that might otherwise have trouble securing loans, including those that are owned by women, people of color and veterans, or situated in rural areas.

Big banks that received taxpayer bailouts during the global financial crisis a decade ago are now too slow in helping small businesses seeking assistance through a $349 billion emergency lending program, according to a high-level Small Business Administration official, the Washington Post reported. Some banks “that had no problem taking billions of dollars of free money as bailout in 2008 are now the biggest banks that are resistant to helping small businesses,” SBA Nevada district director Joseph Amato said in the Monday teleconference about the Paycheck Protection Program. During the teleconference, Amato acknowledged the SBA struggled to launch the emergency lending program, intended as a lifeline to millions of small-business owners during the economic collapse caused by the coronavirus. But big banks had not done enough to help the program and small businesses, he said. “There is really no risk to the bank,” Amato said of the lending program. “It just comes down to … the same banks that literally took billions of dollars with one page from [then-Treasury Secretary Henry Paulson] are the ones saying the documentation isn’t clear enough for them.”

Many small businesses could have another thing to worry about when they come out of a coronavirus coma: higher credit-card fees, the Wall Street Journal reported. Visa Inc. and Mastercard Inc. had planned to raise swipe fees on many merchants this year, and the changes in some cases would be hardest on small businesses. It is unclear if the fee changes, in the works for months, will be rolled out if the pandemic persists. Visa’s potential plans include increasing interchange fees associated with many consumer credit cards for many of the smallest retailers while lowering them for many of the largest ones, according to some of the people and a document reviewed by the Wall Street Journal. Many restaurants, both large and small, could also be affected. A Mastercard spokesman didn’t comment directly on the potential changes but said that delaying the planned new fees “allowed our customers and partners to focus on their core activities and manage through this unprecedented event.” Both companies pledged to support their clients. Visa and Mastercard also said this week they were committing $210 million and $250 million, respectively, to helping small businesses.

Five days after the start of a $349 billion emergency effort to get money into the hands of small businesses, the agency at the heart of the program is emerging as its biggest bottleneck, the New York Times reported. The Small Business Administration, lightly staffed and working with aging technology, has been caught unprepared for the onrush of demand from desperate small-business owners who urgently need these loans as the coronavirus stalls the economy. In a boom year, the agency backs $30 billion of small-business loans — about the same amount that banks are now seeking on behalf of their customers in a day. Larry Kudlow, the director of the National Economic Council, said yesterday that 178,000 loans totaling $50 billion had been approved for small businesses through the Paycheck Protection Program that was unveiled Friday by the SBA and the Treasury Department. But bankers, small-business owners and others participating in the program say very little of that money has actually reached companies seeking the cash. The delays are causing confusion and panic among borrowers, especially those who see Trump administration officials playing up the program’s success. They worry they are being left behind. “The expectation that this $2 trillion package would go through Congress and that the money would be flowing three days later, that was never a realistic expectation,” said Patrick Ryan, the chief executive of First Bank, a lender based in New Jersey. “But I get why people are frustrated.”

U.S. Senate Majority Leader Mitch McConnell said on Friday the U.S. Congress will work on another coronavirus relief bill, with healthcare topping the list of priorities, Reuters reported. McConnell’s comments, in an interview with the Associated Press, signaled leading Republicans were willing to join Democrats in working on what would be a fourth bill responding to the pandemic, which has taken over 6,000 lives in the United States, with over 25 percent in New York City. Infections in the United States account for about 24 percent of the more than 1 million cases worldwide. Previously McConnell had shown little interest in joining Democratic House Speaker Nancy Pelosi in working on another coronavirus measure, saying lawmakers should wait to see whether more aid is needed after the Trump administration implements the three response bills already passed by Congress, including an unprecedented $2.3 trillion package signed into law on March 27. Read more.

Don’t forget to register for these important abiLIVE webinars:

- TODAY: Tools to Navigate the Financial Crisis Related to COVID-19 (Panel features Former House Speaker John Boehner!)

- Tuesday: The Consumer Provisions of the CARES ACT, and Local Court Responses to the Pandemic

- Wednesday: Preference Update: SBRA’s Due Diligence Requirement