After a stumbling start three months ago, the government's centerpiece relief program for small businesses is ending with money left over.
The Paycheck Protection Program was scheduled to wrap up Tuesday night after handing out 4.8 million loans totaling $520 billion to preserve workers' jobs during the coronavirus pandemic.
There was $134.5 billion remaining as of Saturday that will be returned to the Treasury unless Congress repurposes it.
"The fact that it was able to reach so far into the small-business sector is a major achievement, and those things are worth acknowledging and celebrating," said John Lettieri, chief executive of the Economic Innovation Group, a think tank focused on entrepreneurship. "But we're still in a public health crisis, and we're facing a long, slow, uneven return. Millions of businesses still have their survival at risk."
The hastily constructed and frequently chaotic aid program, run by the Small Business Administration but carried out through banks, provided businesses with low-interest loans to cover roughly 2½ months of their typical payroll costs. Those that use most of the money to pay employees can have their debt forgiven.
The cash went to a wide variety of companies: manufacturing firms with hundreds of workers, Main Street retailers with a few dozen employees, and freelancers working for themselves. The loans ranged from a few hundred dollars to $10 million and allowed businesses to keep paying employees -- even if they had nothing to do but sit at home.
The program appears to have helped prevent the nation's staggering job losses from growing even worse. Hiring rebounded more than expected in May as companies in some of the hardest-hit industries, especially restaurants, restored millions of jobs by recalling laid-off workers and hiring new ones.
But the program was marred by technical problems -- like overtaxed computer systems that crashed -- and confusing, frequently revised rules that frustrated borrowers and lenders alike. Some banks limited their lending to companies with which they already had relationships.
Treasury Secretary Steven Mnuchin said during a House Financial Services Committee hearing Tuesday that he has had discussions with senators from both parties about allowing the remaining funds to be repurposed. The change, which would require congressional action, would be designed so that hard-hit industries such as restaurants and travel would have access to the money.
Lenders cited two main reasons there was money left over. First, most eligible companies that wanted loans were ultimately able to obtain them. (The program limited each applicant to one loan.) Also, the program's complicated and shifting requirements dissuaded some qualified borrowers, who feared they would be unable to get their loans forgiven.
Trying to comply with those rules was a challenge for many businesses.
Tracy Singleton closed her farm-to-table restaurant in Minneapolis, the Birchwood Cafe, in mid-March and laid off all but a handful of her 62 workers. She received a $382,200 loan in early April, a week after the program began, and soon spent it all -- even though she will not be fully reopening anytime soon.
When she received the loan, businesses had just eight weeks to spend the cash if they wanted to have the loan completely forgiven. So Singleton, who had switched to curbside pickup sales, brought back dozens of workers, brainstorming new projects for them to tackle. Her payroll ballooned from a skeleton crew of eight to a peak of 48 employees.
But as the clock ticked down to the end of her eight weeks of support, it became clearer to lawmakers that the downturn was not ending anytime soon.
Congress amended the loan program in early June to give recipients nearly six months to use their aid money, but Singleton had already spent most of her funds. When the money ran out, she laid off workers again. She is down to a staff of about 20.
"We looked at this as a bridge," she said. "Then our time was up, and there's no solid ground to stand on yet."
With Congress bitterly divided about what any new stimulus package should look like, little other help is on offer. Companies with fewer than 500 workers can turn to another Small Business Administration program, the Economic Injury Disaster Loan fund, but it has struggled with overwhelming demand and has imposed a $150,000 cap on its loans. The Federal Reserve's new Main Street Lending Program offers loans of $250,000 and more but on more onerous terms.
Republican Sen. Marco Rubio of Florida has started a bipartisan push to work on the next phase of relief.
Rubio, who is chairman of the Senate Small Business & Entrepreneurship Committee, is reconvening a task force that helped create the Paycheck Protection Program.
Rubio told reporters Tuesday that his preference is to use remaining program funds for a second round of assistance targeted at the smallest of firms and those in underserved communities.