SAN FRANCISCO/WASHINGTON (Reuters) - When the U.S. government first rolled out forgivable loans to small businesses in early April under the Paycheck Protection Program, loan officers at Bank of the West in Grapevine, Texas worked nights and weekends to process a tsunami of applications.

But since those first few frantic weeks, demand has “just dried up,” said bank president Cindy Blankenship. On May 15 the bank stopped taking applications for PPP loans.

Nationally the program remains active. But data from the Small Business Administration shows net weekly PPP lending has actually been negative since mid-May, as fewer firms applied for loans, and some borrowers returned funds. tmsnrt.rs/2ZuvQvc

All told, the SBA says it had approved $512.2 billion in PPP loans as of May 21. That’s nearly $150 billion less than the $660 billion allocated to the program, which was designed to keep Americans on company payrolls and off unemployment assistance.

Many of Bank of the West’s PPP borrowers haven’t touched their PPP loan deposits, which total $87 million, Blankenship says, partly because they are confused about the terms. “I think it’s a mixture of uncertainty and anxiety and fear, and the uncontrollable factor about employment and rehiring.”

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