US Treasury Secretary Steven Mnuchin will ask Congress for an additional US$200 billion to reinforce a new loan program for small businesses that has been overwhelmed with applications, according to a report Tuesday.
The Paycheck Protection Program (PPP) launched Friday offers $350 billion in government-guaranteed financing through private lenders, which will be forgiven if businesses ranging from shops to restaurants use the funds largely to pay their workers.
As applications have flooded in, Mnuchin said earlier Tuesday that he would go back to Congress for more money if needed.
The Washington Post said the Treasury is preparing a request for $200 billion, citing two people briefed on the matter.
In a statement, Senate Majority Leader Mitch McConnell said he wants to get lawmakers to approve the infusion on Thursday.
The PPP is part of the $2.2 trillion rescue package that Congress approved in late March, and was rushed out by the Treasury and the Small Business Administration last week.
Officials have touted the program as a success, but banks have been frustrated by the lack of clear guidelines on how the program will work and businesses have been left in limbo about when or whether they will receive their money.
President Donald Trump said Monday thousands of businesses had applied for $40 billion in relief, which will in turn save two million jobs.
Mnuchin said on Fox Business that 3,000 lenders are participating in the program so far.
“The banks are doing a great job, they’re just overwhelmed with the request for a loans,” he said, adding, “If you can’t get a loan today or tomorrow, don’t worry. There will be money. If we run out of money, we’ll go back for more.”
The Independent Community Bankers Association (ICBA) on Monday called the launch of the program “flawed.”
ICBA president Rebeca Romero Rainey called for increased funding for the lending program, saying the $349 billion “is frankly inadequate for the magnitude of need in the American small business community and is likely to run out quickly.”
The funds “will be depleted rapidly, and thousands of cash-starved small businesses who believe they were promised access to credit will be frustrated and angry,” she said.