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Corporate Alert: PPP Loan Funding Replenished - 3 Things You Need to Know
on April 24, 2020
Late in the evening on April 23, 2020, the House passed the newest federal stimulus package aimed at providing additional financial relief for small businesses. Specifically, the Paycheck Protection Program (PPP) and Health Care Enhancement Act, aims to help those businesses who were shut out of the first round of funding of the SBA’s PPP Loans and Emergency Injury Disaster Loans (EIDL). This legislation does not change or clarify the provisions of the CARES Act. Rather, it provides additional funding for the SBA emergency funding programs, including $310 billion for PPP, $50 billion for EIDL grants and loans, and also provides additional funding for health care providers and COVID-19 testing expansion. If you haven’t already received a PPP Loan, there are 3 things you must know to take advantage of this “second bite at the apple”:
- Think Small and Local - Were you having a hard time getting the attention of your “big bank” in the first round of the PPP application process? This bill specifically appropriates $60 billion for PPP loans made by “community financial institutions”, including credit unions, minority deposit institutions and microloan intermediaries. This provision ensures those without long-standing, existing banking relationships, can seek relief from local financial institutions. It may also speed up the loan approval and funding process as your application won’t be competing with millions of others at the same lending institution.
- Act Quickly - The first round of funding for these loan programs was depleted in 13 days. It’s likely the second round of funding will be depleted just as quickly as there are still many loan applications waiting to be processed from the initial appropriation of funds. If you have not applied for the PPP or EIDL programs, you should do so immediately. Contact your professional service advisors, including accountants and attorneys, to ensure you have all the proper documentation to support your loan application.
- Agricultural Enterprises May Now Apply - In the first round of funding, those in farming and agricultural businesses were expressly prohibited from taking advantage of the SBA’s emergency funding programs. However, the reach of these programs has now been extended to include agricultural enterprises that meet the SBA’s definition of a small business concern.
Whether it’s preparing a PPP loan application or helping business owners achieve maximum loan forgiveness once a PPP loan has been funded, the attorneys at Brouse McDowell are dedicated to helping small business owners navigate this process.
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