US small business programme will start this week, Mnuchin says

Workers can expect direct deposits into accounts or cheques within three weeks, Treasury secretary pledges

Treasury Secretary Steve Mnuchin speaks with reporters about economic impacts of the coronavirus outside the White House, Sunday, March 29, 2020, in Washington. (AP Photo/Patrick Semansky)
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Treasury Secretary Steve Mnuchin said he expects to have a small business loan programme up and running in the coming week while workers can expect aid from the $2 trillion (Dh7.34tn) stimulus package in the form of direct deposits or cheques in about three weeks.

The administration is focused on getting "this money into the economy quickly", Mr Mnuchin said on Fox News Sunday, one of two television appearances he made yesterday. "That's a combination of small business loans that will be available this week" and cheques to households which he called "bridge cheques".

“Any FDIC bank, any credit union, any fintech lender will be authorised to make these loans” to a small business subject to certain approvals, Mr Mnuchin said. He was the White House’s lead negotiator on a $2 trillion economic stimulus package signed into law by President Donald Trump on Friday to buffer the economy against a wide-scale shutdown and joblessness as the coronavirus swept through the country.

The magnitude of the economic devastation being wrought by the coronavirus pandemic was laid bare on Thursday when the US government reported an unprecedented surge in the number of people seeking jobless benefits.

A total of 3.28 million people filed for unemployment insurance in the week ended March 21, dwarfing previous highs in Labor Department reports published since 1967.

In a separate interview on CBS News's Face the Nation, Mnuchin said the stimulus package should provide economic relief to workers and business for about eight to 10 weeks.

Unlike the Troubled Asset Relief Program, where the Treasury compelled banks to beef up their capital during the financial crisis, Mnuchin told CBS, “We are not going to force money on any companies”.

The firms have to request aid, he said, and the Wall Street banks helping to manage the assistance will be working for “very reduced rates”.

Lawmakers are urging the administration to get the funds out quickly. Senator Mike Crapo, an Idaho Republican who is chairman of the Senate Banking Committee, wrote to Federal Reserve chairman Jerome Powell and Mr Mnuchin on Saturday, urging both to “work quickly” to issue guidance so that “businesses – including small and medium-sized businesses – states, municipalities and Tribes, understand what programmes and facilities are available.”

The Fed has announced its intention to launch a Main Street Lending Facility to loan directly to medium-sized businesses while the stimulus bill recommends support for the markets that finance states and municipalities.