Coronavirus Stimulus Package – Paycheck Protection Program Loans Revisited

If you’re a business owner and you were shut out from applying for or receiving a loan from the Paycheck Protection Program (“PPP”), complete your application now and have it ready to file. In fact, check with your lender to see if they are accepting applications in anticipation of receiving additional program funding.

As many small business owners know, the CARES Act authorized the PPP Loan program, funding it with $349 billion. PPP Loans may potentially be forgiven provided the loans are used to cover payroll costs, and most mortgage interest, rent and utility costs over the 8-week period after the loan is made. Employee and compensation levels must be maintained. The program officially started on April 3, 2020, for small businesses, and April 10 for sole proprietors and independent contractors, but quickly ran out of money on April 16. As a result, the Small Business Administration (“SBA”) stopped taking applications from lenders. Depending upon the lender, some have stopped taking applications from businesses while others are accepting them and holding them until additional funding is received.

As of the publication of this release, the Senate has passed proposed legislation to provide additional funding of another $310 billion for PPP Loans. $60 billion of that amount is being set aside for small lending institutions who tend to serve the very small businesses with under 20 employees. Another $60 billion will also be available for the SBA’s Economic Injury Disaster Loans program which also ran out of money. The House is expected to pass the legislation, and President Trump has indicated that he will sign it.

Additional funding for these programs should be available very shortly. Act now to ensure that you have the chance to receive the loan!