ATTENTION SMALL BUSINESS OWNERS: A SECOND BITE OF THE (PPP) APPLE
On Tuesday, April 21, 2020, the U. S. Senate passed an interim funding bill which provides for additional forgivable loans to businesses and non-profit organizations. The bill includes $320B for the popular Paycheck Protection Program (“PPP”). The original funding for the PPP in the amount of $349B was a part of the $2.2 Trillion CARES Act. The PPP is intended to help support small businesses and to keep people working.
The PPP loans are forgivable provided that certain criteria are satisfied, including that 75% of the loan proceeds is used for payroll. The initial batch of PPP funding was exhausted by April 16, 2020. One of the glitches with the initial funding was the fact that businesses who did not have an existing credit relationship with a large or medium size bank were at a disadvantage.
In order to address this disparity, the new package approved by the Senate sets aside $60B of funding for PPP loans by small banks to reach smaller and minority businesses. The U. S. House of Representatives must also approve the new funding. The House is scheduled to consider the legislation on Wednesday, April 22, 2020 and, if approved, will be sent to the President for signature.
If you were closed out of the initial PPP funding and are eligible for such funding, be prepared to immediately submit or resubmit your PPP loan application to your bank.
If you have any questions concerning the Paycheck Protection Program, please contact: