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Memphis News & Weather | Memphis, TN | WATN - localmemphis.com

Federal loan program to help small businesses runs out of money

As Congress debates adding more money to the loan program, business owners are searching for funding.

ATLANTA — A federal loan program, designed to help small businesses during the coronavirus pandemic, has reached it’s $350 billion cap.

At Smugs Fitness in the Kirkwood neighborhood in Atlanta, owner Sam Mugavero applied for his loan about 10 days ago.

“I haven’t heard anything back. The other business owners I know who got it, they say it took 7 to 10 days. So I’m hoping we’ll get it,” Mugavero said. "But maybe we missed the window.”

Business was so good for Mugavero, that he recently expanded the gym. He hopes to open a second location in the summer.

In the meantime, Mugavero has started offering virtual training.

“We’re able to operate at about 80 percent, which is fantastic,” said Mugavero.

The Small Business Administration has approved more than 1.6 million loans from nearly 5,000 lenders before the fund was exhausted. The program operated on a first-come-first-serve basis.

RELATED: Small business lending program on hold after reaching lending limit

Brian Goebel, who runs Start:ME, the microbusiness accelerator program at the Goizueta Business School at Emory University, said small businesses across the country are facing dire circumstances.

“Many of them are in a place where if they don’t receive some emergency support, it’s questionable whether they’ll be able to continue forward,” Goebel said.

Goebel recommends to small business owners who haven’t received a loan to keep in contact with their lenders.

As Congress is debating adding more funds to the stimulus program, more money may become available to business owners.

RELATED: Financial advisor on what happens when businesses reopen: Customers may not feel safe getting out right away

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