Congress Set to Expand Small Business Loan Program

Fight disinformation. Get a daily recap of the facts that matter. Sign up for the free Mother Jones newsletter.

There’s been heavy coverage of the problems we’ve had rolling out the coronavirus rescue programs. Unemployment offices are swamped. Conditions are too onerous for the small business loan program. The $1,200 checks won’t go out until late summer for some people.

This was pretty much inevitable. Standing up programs like this in a matter of weeks was never going to be easy. But the very fact that they’re running into problems is evidence of just how popular they are. Take the small business loan program, for example. It has already approved $50 billion in loans in just three days and looks like it will be oversubscribed within weeks:

Treasury Secretary Steven Mnuchin on Tuesday asked congressional leaders to swiftly commit another $250 billion to replenish a new small business coronavirus program that is being overwhelmed by surging demand….Democrats haven’t rejected the proposal but they have said they want to prioritize other assistance, such as hazard pay for workers.

There are two things going on here. First, the demand for small business loans—despite the well-known issues with bank restrictions—is sky high. Since our goal is to keep as many as possible of these businesses solvent, adding more money to the fund makes sense.

However, there’s also a problem: in order for the loans to be forgiven, they have to be used mostly for payroll. But a lot of small-business workers have already been laid off and have applied for unemployment benefits. Thanks to the rescue bill, these benefits are, in most case, considerably more than they were paid for working. So why would they go back?

One answer could come from Chuck Schumer’s proposal to offer “hazard pay” to essential front-line workers so they don’t feel cheated by making less than they would if they were laid off. Perhaps this could be extended to workers who are rehired by shuttered businesses? If so, it would eliminate the motivation to stay on unemployment. More details to come, I’m sure.

HERE ARE THE FACTS:

Our fall fundraising drive is off to a rough start, and we very much need to raise $250,000 in the next couple of weeks. If you value the journalism you get from Mother Jones, please help us do it with a donation today.

As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

payment methods

ONE MORE QUICK THING:

Our fall fundraising drive is off to a rough start, and we very much need to raise $250,000 in the next couple of weeks. If you value the journalism you get from Mother Jones, please help us do it with a donation today.

As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate