Paycheck Protection Program closed to new applications
The Payment Protection Program (PPP), the federal program designed to help keep small businesses open during the COVID-19 pandemic, closed to new applications on Friday as funding dried up.
As The Wall Street Journal reported, the $961 billion program was scheduled to end on May 31, but the Small Business Administration (SBA) sent out a notice to lenders on Friday saying that “due to the high volume of originations today, the portal will be closing for new originations.” The SBA stated in its notice that it had received more than 125,000 applications in the 24 hours before it notified lenders of the PPP’s closing.
Though the program has closed, the Journal noted that the SBA has another month to process applications.
“PPP was an important element that helped us stay afloat,” Debbie Parrott, owner of Indiana-based Highmark TechSystems, told the Journal. “We were one of the first to get shut down, and we’ll be one of the last to be turned back on.”
Parrott’s business creates exhibitions for trade shows, and she told the Journal that she does not anticipate trade shows to begin again until late summer.
Though the PPP, established as part of the CARES Act, helped businesses stay afloat, it was also targeted for fraudulent loan payments. Fraudsters across multiple states were able to obtain PPP loans worth millions of dollars by misrepresenting the number of employees they had or the very existence of their businesses.
In early May, a California man, Mustafa Qadiri, was arrested on charges of obtaining $5 million worth of PPP loans through fraudulent means. Qadiri allegedly used the money to buy luxury cars, including a Lamborghini.