New federal loans to support imperiled businesses and employees during the COVID-19 economic crisis surged to $603 million in Alaska in a little more than a week, the Small Business Administration said on Tuesday.
The money falls under the $349 billion Paycheck Protection Program approved by Congress last month.
The Small Business Administration has quickly approved most of that funding since it began accepting applications April 3. The program is scheduled to end on June 30 and Congress is considering adding additional funds.
In Alaska, 2,703 loans have been approved, according to a report from the agency tracking the loans through Monday.
The loans are one of several forms of emergency federal assistance that have been rolled out to protect the U.S. and state economies amid widespread business closures to contain the virus.
Stimulus checks of $1,200 for most Americans will begin to arrive this week, and the state said on Tuesday that unemployment benefits have temporarily been bolstered.
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The Small Business Administration does not have information on the number of loan approvals made under the Economic Injury Disaster Loan, a separate loan program address the virus’ economic fallout, said Nancy Porzio, director of the agency’s Alaska district.
The Paycheck Protection loan offers loans up to $10 million, provided through banks. Much of the loan can be forgiven, meaning it does not have to be paid back, if it’s spent on payroll and other essential business needs.
Some banks, overwhelmed by applications, have quickly limited who can apply or halted the application process.
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Jon Bittner, director of the Small Business Development Center in Alaska, said the challenges stem from unprecedented demand.
“Many lenders are swamped by applications and finding it difficult to stay ahead of demand,” he said.
He has seen reports that some Alaska businesses have received funding, he said.
“I think this week we’ll see a lot of this money deployed,” he said.
“Due to the extraordinarily high number of PPP applications in process, First National Bank Alaska is temporarily suspending the processing of new applications,” the bank said Thursday.
Northrim Bank has a similar message on its website.
Credit union Alaska USA is limiting loans to customers with an existing business account.
Wells Fargo, the largest bank in Alaska, encourages small businesses to begin the application process. But its website also acknowledges the high demand and says other potential lenders are available on the federal agency’s website.
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