Billions of dollars still on the table as pandemic bailout deadline approaches for small businesses

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Title : Billions of dollars still on the table as pandemic bailout deadline approaches for small businesses
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FILE - In this June 8 photo, Danice clothing store manager Alexander Nee checks invoices as the Bronx business reopens, in New York. Restaurants, retailers and salons are desperately trying to stay afloat as the U.S. economy reopens in fits and starts after months in a coronavirus lockdown. But billions of dollars allocated by Congress as a lifeline to those very businesses are about to be left on the table when the government's Paycheck Protection Program stops accepting applications for loans Tuesday, June 30. (Mark Lennihan/AP)

The deadline for a crucial coronavirus lifeline for small businesses struggling over the pandemic is quickly approaching, with billions of dollars still on the table.

Business owners have until Tuesday to apply for funds in the federal government’s Paycheck Protection Program, a safety net established to give companies devastated by government-ordered shutdowns money to pay staffers and survive.

The fund was designed to help businesses such as restaurants, retailers and salons stay afloat after losing revenue to the job-killing pandemic.

Congress authorized $659 billion for the relief fund, which financial analysts credit for easing the nation’s jobless rate from 14.7% in April to 13.3% in May.

FILE - In this May 4 photo, waitress Jill Lawrence. right, waits on customers at Shakers American Cafe Monday in Orlando, Fla. (John Raoux/AP)

But more than $140 billion in loan money remained unclaimed, according to a Small Business Administration spokeswoman, who said it will be up to Congress to decide what to do with any leftover funds.

But businesses left in the lurch said the fix was in from the beginning because the program created application obstacles that stopped countless small businesses from seeking or getting the funds.

The program’s shortcomings also made it more difficult for minority-owned businesses to get loans, according to a report from the Center for Responsible Lending, a research group.

“It was a flawed structure to begin with,” said John Arensmeyer, CEO of Small Business Majority, an advocacy group. “It favored established businesses. It was set up to give money to people with strong banking relationships.”

FILE - In this Friday, June 26 photo, Barber Mike McAndrew holds a mirror as customer Rob Verrastro looks at his new haircut at Three Saints Barbershop and Shave Parlor in Jessup, Pa. (Christopher Dolan/AP)

Some banks rejected any companies that did not have multiple accounts, Arensmeyer said. Sole proprietors and freelancers, meanwhile had to wait a week before applying, and many found they could not supply the kind of documents the government and banks demanded.

The law also required that companies spend 75% of their loan money on payroll to qualify for forgiveness.

But some businesses, like restaurants that were forced to close, needed money for rent and other costs to reopen.