May 3 (UPI) — National Economic Council Director Larry Kudlow said Sunday that more loans for small businesses affected by the COVID-19 pandemic may be needed but the Trump administration has not yet decided whether to provide a third round of funding.
Kudlow told CNN State of the Union host Jake Tapper that “there’s kind of a pause period” in regards to plans for additional funding for the Paycheck Protection Program as businesses continue to apply for loans provided in the most recent coronavirus relief bill.
When asked why there was a pause on plans for new funding, Kudlow said the administration would look to distribute the current wave of funding first.
“At this particular juncture, let’s execute the continuation of what we’ve already done, let’s see what the results are,” he said, adding the administration will assess what needs to be done in “a couple of weeks.”
Tapper noted the Small Business Administration has already administered $175 billion loans out of the $310 billion authorized in Congress’ latest relief package signed last week asking if this was a signal a third tranche of funding is necessary.
Kudlow responded that it “may be” necessary, adding that the program has been very popular.
“We waited a little bit too long, I thought when the last tranche ran out,” Kudlow said. “Let’s not make the same mistake again.”
The initial round of $454 billion in funding to allow small businesses to continue to pay employees and cover other expenses as many states closed down to prevent the spread of the coronavirus was provided by the Coronavirus Aid, Relief and Emergency Services Act signed in March and ran out quickly before being replenished last month.
Small businesses reported difficulty obtaining loans and several large businesses including several Ivy League universities, restaurant chain Shake Shack and the NBA’s Los Angeles Lakers were allocated funding that they later declined or returned.
On Wednesday, the SBA temporarily limited applications to lenders with less than $1 billion in assets in an attempt to “assist small community lenders and ensure their small business customers have access” to the loans.
SBA Administrator Jovita Carranza and Treasury Secretary Steven Mnuchin on Sunday issued a joint statement saying 2.2 million loans have been distributed in the second round of the program including more to smaller businesses.
“Nearly 500,000 of the loans were made by lenders with less than $1 billion and assets and non-banks,” they wrote. “These lenders include Community Development Financial Institutions, Certified Development Companies, Microlenders, Farm Credit lending institutions and FinTechs.”
Kudlow also responded to calls from Democratic and Republican governors seeking more federal funding toward local governments facing budgetary concerns.
Though he noted the federal government has “poured hundreds of billions” into states, he said “perhaps there will be more of that, we will wait and see.”
The finding must be linked to whether states have sanctuary cities to protect undocumented immigrants.
“I want to say this regarding the states, as you know the president has [from] time to time spoken about linking that to sanctuary cities. I don’t think anything [has] been decided yet,” Kudlow said.
