Yesterday, the Senate passed amendments to the Payroll Protection Program (PPP), economic disaster loans, and emergency grants section of the CARES Act. It is expected to be passed by the House and signed by the President later this week. Although he bill does not contain provisions for additional stimulus checks or tax breaks, it does provide additional funding for two vital programs for small businesses.
The bill increases funding for the Payroll Protection Program by $310 billion. PPP was part of the CARES Act passed last month which allowed small businesses and nonprofits to apply for low interest SBA loans to continue paying employee salaries, mortgage interest, rent, and utilities for up to 8 weeks which would also be eligible for loan forgiveness if certain criteria are met. The program was originally funded with $349 billion and was totally exhausted within a few weeks. The bill does not change any of the original eligibility qualifications for the loans, but does provide a carveout of $60 billion to be set aside for smaller lending institutions such as community banks and credit unions.
The bill also sets aside an additional $60 billion for the Emergency Injury Disaster Loan (EIDL) program, of which, $10 billion is set aside for EIDL grants and $50 billion for loans under the EDIL program.
These funds are on a first-come, first-serve basis and are only available until the appropriated funds are exhausted. If you are a small business or nonprofit (generally with no more than 500 employees) and have not yet applied for funds under either of these programs, we strongly encourage you to act now to be sure your application is ready for processing when the funds become available. If you have already applied for a loan or have been denied funds, contact your bank to inquire about the status of your existing application.
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