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It took 13 days for the Paycheck Protection Program to run out of money. What comes next?

One of the most sweeping business rescue programs in U.S. history ran out of money Thursday, leaving millions of small business owners and workers in financial limbo.  

The $349 billion Paycheck Protection Program was completely depleted after just 13 days in operation, as Democrats in Congress refused to allow a general extension of funding without approving additional money for other recovery programs as well. 

The program, known by the acronym PPP, was created to help small businesses stay open and continue to pay employees for up to eight weeks. The relief is unprecedented: The federal government is providing loans that will be completely forgiven later if used to cover payrolls, leases and utilities.  

But Thursday morning, the Small Business Administration sent out a notice that it is currently “unable to accept new applications…based on the available appropriations funding.” 

The SBA said that before the freeze, at least 1.6 million businesses were approved for loans through the program. But the money went on a first-come-first-served basis, and with 30 million small businesses in the country, millions of others were left waiting with no indication of when they could see relief money.

“It’s increasingly desperation,” said Holly Wade, research director for the National Federation of Independent Businesses, a leading organization for small businesses.

“Many of our members haven’t heard if they’ve been accepted into the program, or what,” she said. “I think there will be a lot of panic today and the next few days.”

President Donald Trump’s administration and Republicans in Congress last week proposed adding another $250 billion in funding for the PPP. But Democrats objected, with Senate Minority Leader Chuck Schumer and House Speaker Nancy Pelosi arguing that at least some of that funding must be targeted to community banks and areas where small businesses have little to no access to these loans. Democrats also are pushing for increased funding for hospitals, state and local government, and the SNAP program, formerly known as food stamps. 

READ MORE: The fight over the next coronavirus aid package, explained

“We don’t want [the next bill] to perpetuate the disparity of credit for some of our businesses,” Pelosi told reporters on a call Thursday. She said Democrats are concerned for small businesses but also see money for hospitals and states and cities as urgent needs now. 

The speaker indicated she would not be rushed by the Trump administration. 

“I got a call from the Treasury secretary [last week] saying he needed a quarter of a billion dollars within 48 hours,” Pelosi said, pausing before adding: “Oh really?” 

Republicans blasted Democrats for what they described as holding millions of peoples’ livelihoods hostage. 

“This is not the moment in time to play politics,” House Minority Leader Kevin McCarthy said on his own conference call with reporters. “This money doesn’t go to anyone, except to keep people employed…All they have to do is say yes today, and let’s move this forward.”

When frozen on Thursday, the PPP had allocated some $339 billion of the $349 billion set aside for  small businesses. According to a Senate aide familiar with the matter, the SBA told lawmakers that it needed the remaining $10 billion to pay fees it agreed to give to lenders involved in the program. 

One group is particularly hard hit by the impasse: the self-employed, a category that includes a wide spectrum of workers including many farmers, plumbers and accountants. The vast majority of small businesses are sole proprietorships or other forms of single-person enterprises. 

The self-employed were not allowed to apply for the small business program until one week ago, as the SBA needed time to draft guidelines for how banks should work with them.  

As a result, many were placed in the back of the line for getting help.

White House and Congressional leaders are continuing to negotiate a funding patch for the PPP as well as another, smaller program that has also run out of funds — the Economic Injury Disaster Loan, or EIDL. There is no clear timeline yet for a possible deal.

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