text: Small business stimulus program runs out of money after Iowa gets $3.75 billion
  Tyler Jett Lee Rood
  The stimulus program set up to keep small businesses afloat during the coronavirus pandemic ran out of money Thursday.
  But the U.S. Small Business Administration said Thursday said it had ceased accepting new applications for the loans and enrolling new lenders because of the lapse in funds.
  According to the SBA, banks had issued 22,295 federally backed forgivable loans to businesses in the state through Monday. The program was designed to supply small business owners with enough money to keep employees on their payroll for at least two months.
  One Des Moines recipient, RAYGUN owner Mike Draper, said the aid is essential to keep businesses going as they face an uncertain economic future.
  "The program is absolutely critical," said Draper, whose T-shirt and novelty store chain also has locations in Cedar Rapids, Kansas City and Chicago. "But the main mystery now is what will happen over the next two, four, six weeks. As long as people are afraid of the coronavirus, it makes reopening the economy really difficult."
  Though his business has had to shift to online-only operation, Draper said he's been able to keep all of his full-time employees in Des Moines. The forgivable loan he obtained under the federal program will help him rehire full-time employees in other cities. The opening of a new store in Omaha has been delayed until June.
  Started April 3 as part of the Coronavirus Aid, Relief and Economic Security, or CARES, Act passed in late March, the Paycheck Protection Program got off to a rough start in Iowa, suffering delays as bank employees tried to process loan applications.
  Some could not get into E-Tran, the SBA's online loan processing program, for the first weekend that the loans were available. Others said the rollout was not as efficient in Iowa as in other states.
  Mike Shoafstal, an owner of Soul Flower, an online wholesale and retail business selling sustainable clothing, said he wound up obtaining a loan in Minnesota because that state's Small Business Administration was more organized and forthcoming with information about which banks had been approved for the loans.
  ► Coronavirus in Iowa: Here's the latest news on the pandemic
  Shoafstal and his wife run their 21-year-old business from Des Moines but have a facility for workers in Golden Valley, Minnesota. The pandemic forced them to lay off all of their employees, but the loan will help them bring back 12.
  Despite the early glitches, data for the program's first week showed Iowa ultimately fared better than some other states.
  The $3.75 billion Iowa businesses received ranked 24th among states, though Iowa's population of 3.1 million ranks 31st, according to a U.S. Census Bureau estimate. (Texas and California, the country's two most-populous states, ranked first and second, respectively, in loans received through Monday.)
  Under the Paycheck Protection Program, small business owners could receive a loan equal to about 2 ½ months of payroll. They will not have to pay the money back as long as they spend 75% of it on employee salaries. The rest can be spent on rent, utilities and mortgage payments.
  Business owners also must maintain the same number of employees, at the same pay, they had before governors ordered businesses to close to slow the spread of the coronavirus. The SBA will reimburse banks for the balance of forgiven loans.
  Business owners were eligible for up to $10 million. But according to the SBA's data, most loans were much smaller, with about 85% totaling $350,000 or less.
  According to the SBA, about two-thirds of the loans went to businesses in six sectors: construction; professional, scientific and technical services; manufacturing; health care and social assistance; accommodation and food services; and retail trade.
  The Paycheck Protection Program was one of two SBA loans available to small businesses in response to the coronavirus spread. The other, the Economic Injury Disaster Loan, provides up to $2 million at an interest rate of 3.75%.
  Congress plans to allocate another $250 billion for the program. The impasse that's holding it up pits the Trump administration and congressional Republicans — who want the program to remain as is — against Democrats. They're calling for money to also go to hospitals burdened under COVID-19 caseloads and to states and local governments straining as the economy slides into recession.
  They also want to make sure the Paycheck Protection Program is opened up more to businesses that don't have established relationships with the banks that have been handling applications for rescue funding.
  The need for more aid is dire, said Neil Bradley, executive vice president of the U.S. Chamber of Commerce, pointing to weekly unemployment figures that showed 5.2 million more American filed jobless claims last week, bringing the total over the past four weeks to about 22 million.
  "Today's tragic and staggering unemployment figures underscores the dire need for bridge funding to keep more Americans on the job and more businesses afloat during the coronavirus economic crisis," Bradley said.
  Lee Rood is the Register's Reader's Watchdog columnist. She helps Iowans get answers and accountability from public officials, the justice system, businesses and nonprofits. Reach her at lrood@dmreg.com or 515-284-8549. Follow her on Twitter at @leerood and on Facebook at Facebook.com/readerswatchdog.