If you didn’t get your Paycheck Protection Program (PPP) or Economic Injury Disaster Loan (EIDL) approved before the funding ran out, get your application ready. Yesterday, April 22, 2020, the House approved the fourth COVID-19 response package, a $383.4 billion measure which will recapitalize several programs that help small businesses and workers financially harmed by the coronavirus pandemic. The oversubscribed Paycheck Protection Package will get an additional $310 billion for forgivable loans to small businesses and nonprofits. It also provides $50 billion for SBA Economic Injury Disaster Loans, as well as another $10 billion for associated disaster grants.
Some changes were included in this package, such as a small lender set-aside for PPP. One criticism of the initial program was that its “first-come, first-served” nature favored larger small businesses. While small lenders, including credit unions, were authorized by the CARES Act to issue forgivable PPP loans, many found that much of the program’s initial funding had been committed before even able to begin processing applications. To ensure that a larger pool of small businesses can access loans under PPP, $60 billion out of $310 billion has been be reserved for small and moderate sized financial institution. Click here to view the additional guidance released by Treasury regarding PPP. The new package also expands the eligibility of EIDL grants and loans farming and agricultural-related businesses, which are usually ineligible for SBA since they typically receive disaster aid through the USDA.
Again, if you were too late in applying the last time, please get your application together as soon as possible. It is possible that this additional funding could be spent even quicker than the first round, which had previously been committed in just two weeks.
