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SBA announces 2nd round of PPP funding available

On Monday, the Small Business Administration announced that the second round of PPP loans were available. Yahoo Finance’s Jessica Smith joins The Final Round to discuss the issues the program is facing as companies apply for loans for the second time.

Video Transcript

MYLES UDLAND: Let's turn now to what's happening down in Washington DC. Of course, today, the big story is the replenishment of funding for the PPP program. Jess Smith joins us now for the latest there. Jess, I think as expected, there was some pick-up to the website pretty much as soon as it went online. But where do we stand right now in-- in day one of a-- a program that I think most people believe is-- is going to get drawn down quite quickly?

JESSICA SMITH: Yeah, I think people do expect this money to run out pretty quickly. And as you mentioned, at 10:30 this morning, when the program opened up again, within minutes, lenders started reporting problems with the website, saying that they couldn't access it, it wasn't working, or it was going really slow, as these banks tried to access the program to start applying for these loans. Marco Rubio, Senator Marco Rubio, the chair of the Small Business Committee, talked about this problem, and he says that the SBA is putting in place this pacing program. They're trying to pace the number of applications that they're getting.

He says there were some technical glitches with that, and they are working on it. But that is why he says some lenders were reporting these problems. Another new change today, the Small Business Administration, after hearing some concerns from community banks and Democratic lawmakers, they lowered the minimum number of applications a bank would need to submit in a bulk filing. Yesterday, Treasury said that banks could submit one bulk filing if they had a minimum of 15,000 applications. But today, they lowered that number to 5,000 because people were concerned that that was putting big banks at an advantage.

There were also some other changes this time around designed to help small businesses and those smaller banks. Congress set aside $60 billion specifically for smaller lenders, and the administration, of course, is really discouraging big businesses, publicly traded companies, from accessing these loans. Of course, there was all that backlash about companies like Shake Shack and Potbelly.

Today, we learned the Lakers accessing these small business loans. They are returning those now, and the SBA administrator said that $2 billion from the first round of funding is now back in the pot after these companies are giving that money back. But again, we'll see how long this $310 billion lasts. It took less than two weeks to run out of money this time, and some are saying that could be just a few days before it runs out now.

DAN ROBERTS: Hey, Jess, Dan Roberts here. I know you and I offline have talked a lot about this program. You just mentioned the-- the backlash that some of the bigger companies saw, and I saw that tweet from Jovita Carranza of the SBA saying 2 billion from the first round is back in the pot. It's strange, though, the wording there, it sounds like she says both in returned loans and in-- in loans that weren't approved. So I'm not sure all 2 billion of that is money that has come back from the companies that faced the backlash, although Treasury has now officially asked publicly traded companies that got a loan in the first round to return the loan.

What I have been sort of harder pressed to figure out is exactly where that money goes when the companies say, we're returning our loan. I mean, obviously, I imagine the money at first goes back to whatever bank they applied through, and then maybe the bank funnels it back to the SBA. But have you heard anything more about that in terms of details of those returned loans?

JESSICA SMITH: Yeah, that's what we're trying to figure out as well. Rubio has said that it's going to go back in the pot. We had that tweet that you mentioned from the SBA administrator. But yeah, we're still trying to get more details about how exactly that is going to work. But the goal here is to get that money to the small businesses who actually need it, who were intended to get that money in the first place.

MELODY HAHM: And, Jess, just thinking about the landscape here state by state, at least in California, we've heard several local lawmakers complaining, even though just net they did receive the most loans here in the state of California. But of course, we're the most populous. And then you look at other states, whether it's the North Dakotas of the world, that have not actually implemented stay-at-home orders. They haven't actually seen that many folks testing positive, and there seems to be this disparity and-- of fighting of sorts among states. Have you heard any commentary or color on that?

JESSICA SMITH: You know, I think that's why we're hearing from lawmakers who want to do more, who want to do some form of payments for individual workers. So maybe even if this-- these loans to small businesses aren't working exactly how they need to, the individual people would be taken care of. That's why you're hearing a lot of lawmakers call for those payments. Some are saying $2,000 a month for an adult for the foreseeable future, so I think that's why you're hearing more of that.

So there would be some sort of assurance that no matter what happens with these businesses, at least the individual people would be taken care of. We'll have to see how that plays out. Right now, Congress is gone, but Majority Leader Mitch McConnell just said earlier today that the Senate will for sure be back next week. Still unclear on the House, but we'll see what kind of proposals start getting tossed around once they're back here in DC.

MYLES UDLAND: All right, Jess Smith with the latest down in the Capitol on the PPP.