Coronavirus Stimulus Package – New Funding for Paycheck Protection Program Loans

Small-business owners who tried to apply for the Paycheck Protection Program (“PPP”) but were shut out when initial funding from the CARES Act dried up, need to submit their applications now, if they haven’t already. The PPP received new funding today when President Trump signed into law the Paycheck Protection Increase Act of 2020. These loans will be processed by the Small Business Administration (“SBA”) on a first-come, first-served basis. An additional $310 billion of funding is now available, of which $60 billion is set aside for community-based lenders and smaller banks and credit unions who would typically work with very small businesses (typically 20 or fewer employees). In addition, the Treasury Department issued new guidance on PPP Loans, to steer more of the loans to smaller businesses after recent news revealed that many large companies, including publicly traded corporations, received loans during the first round of funding. The guidance makes explicit that loans must be requested “in good faith, taking into account their current business activity and their ability to access other sources of liquidity.” Further, “such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.”

If you’re a small-business owner who needs financial assistance through the PPP program, do not delay. Submit your application immediately.