When the federal aid package for small businesses known as the Paycheck Protection Program was announced last month, it seemed to offer a lifeline for modest enterprises in dire need of help because of the coronavirus crisis. Passed by a bipartisan majority in Congress, the program offered $349 billion in forgivable loans — essentially bridge loans — to provide the liquidity needed until the economy recovers. Unlike big-industry bailouts, which generate both moral hazard and public anger, the plan held out the attractive promise of providing relief for the smallest shops on Main Street.

But despite good intentions, the program has been a fiasco. It has replicated much of the existing unfairness of the United States economy and has created more resentment than relief. Intended to help the small businesses that give the country much of its character and livelihood, it has helped, more than anyone wants to admit, big chains and medium-size enterprises.

What your average neighborhood preschool needs now is $35,000 or so. But though 74 percent of the approved loans as of April 16 have been for $150,000 or less, 45 percent of the $349 billion in small-business relief has gone to loans over $1 million, and nearly 70 percent has gone to loans over $350,000. The widely reported fact that Ruth’s Chris Steak House, a big chain, got $20 million in forgivable loans is a symbol of what has gone wrong, for that money could have saved a lot of preschools. According to data self-reported by small businesses, 92 percent of applicants have gotten nothing at all.

As Congress negotiates funding to replenish the program, it should not blindly add more money to a flawed scheme but instead address the fact that it is failing to help those who need it most. There is an easy fix: Congress should set aside at least half the money for “real” small businesses: those with 25 or fewer employees. And if Congress fails to do so, banks and other lenders should reserve the money themselves.