As part of the $2.2 trillion coronavirus stimulus package, known as the CARES Act, $349 billion was initially allocated to small businesses as loans. Administered through the Small Business Administration, the Paycheck Protection Plan (PPP) provided small businesses with loans which could result in the potential to obtain forgiveness of debt for eight weeks of salary, benefits, rents/mortgage interest, utilities and other eligible costs. However, as of last Thursday, April 16, the PPP reached its appropriations limit and exhausted the nearly $350 billion of low-interest loans to almost 1.7 million small businesses. According to the National Federation of Independent Business, only 1 in 5 applicants had received money so far. Which left us with three big questions: 1) Will more funds be coming? 2) How much? 3) And when?
Fortunately, lawmakers on Capitol Hill could be answering these questions today, and are expected to approve measures to expand the program which would include the following funds:
- $310 billion for the PPP, of which $125 billion will be dedicated to either small businesses that are unbanked, minority-owned businesses, to rural areas or to small mom-and-pop shops that might not have existing banking relationships;
- $75 billion for hospitals; and,
- $30 billion to expand national COVID-19 testing efforts.
This measure would be the second largest of the four coronavirus response bills so far. It is expected to go to the Senate for a vote later today, and to the House within a couple of days after passage by the Senate. This compromise, as reported by various news outlets, was reached with Congressional leadership and the White House early this morning.
For additional information, the SBA has created an FAQs page on the PPP loans and is being updated periodically as things change.
Our BMF Advisors stand ready to help with questions on PPP loans, disaster and business interruption loans or other answers you need to keep your business moving forward.
Visit our COVID-19 Resource Center for additional information and resources for you and your business.
