On April 7, Larry Kudlow, the White House economic adviser, said that President Trump’s administration would allocate more money to fund government-backed small business loans. He was speaking amid the growing demand for the $350 billion that Congress allocated in March’s rescue package.
In that context, banks in the United States insist that the administration did not offer enough guidance on how to implement the “Paycheck Protection Program”. Banks also stated that the Small Business Administration system for processing applications has malfunctioned.
While speaking to POLITICO, Kudlow defended the implementation of the program that has encountered challenges since the enactment of the $2 trillion economic rescue law. This law was designed to mitigate the devastation of the coronavirus pandemic on the economy.
Banks say that they cannot send money to small business borrowers during the current chaos. There are “$50 billion in loan commitments” and 178,000 loans being processed currently according to Kudlow. He added:
“If the demand is that high, which I would regard as a good thing because we just want to get folks through this tough period, why not ask for more money?”
These loans were created to discourage layoffs and could be forgiven if businesses maintain staff on their payrolls.
On April 6, the Treasury Department introduced new guidance responding to mounting questions from banks on how to issue the loans. This situation that surrounds the small business rescue highlights the confusion from the Federal Government on how to protect Americans during this health crisis.
For now, there is still confusion about the measures to be implemented to rescue an economy that has gone into lockdown and shed millions of jobs.
Kudlow, who is a self-described optimist, believes that the US economy could reopen in the next four to eight weeks.