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Half of new small-business loan funds allotted in first week

Half of new small-business loan funds allotted in first week
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The Small Business Administration (SBA) said it has allotted over half of the $310 billion in a key coronavirus relief fund in less than a week, setting expectations that it will run dry this week.

The SBA said on Sunday that it had already obligated $175 billion of the second tranche of the Paycheck Protection Program funding.

The first round of the program allocated $349 billion in less than two weeks, but critics charged that funds flowed to bigger, more well-connected businesses. Major chains such as Shake Shack and Ruths Chris Steakhouse said they would return their loans following the backlash.

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The second round seems to have been more successful at reaching smaller businesses, with the average loan size falling to $79,000 from over $200,000.

Already, 2.2 million recipients have been granted forgivable loans, intended to cover wages for furloughed workers or those with reduced hours. The entire first round only covered 1.7 million recipients.

"This program had enormous bipartisan support and was designed with everybody at the table," Treasury Secretary Steven MnuchinSteven Terner MnuchinFinancial groups applaud Biden Treasury pick Yellen US sanctions Chinese company for conducting business with Maduro regime Monumental economic challenges await Biden's Treasury secretary MORE said.

"And really the purpose of this was to get workers back to work. And every dollar we spend here is a dollar we save on unemployment insurance," he added.

Mnuchin estimated that the two rounds of the program together would impact 60 million workers.

Over 30 million workers have filed initial unemployment claims since the pandemic began. The monthly labor report, due Friday, will shed a light on how many of those people remained out of work as of mid-April.