$484B Coronavirus Aid Package to Bring Interim Relief for Small Businesses
To replenish the popular Paycheck Protection Program (PPP) for small businesses seeking loans and to bring additional aid to healthcare organizations trying to treat and contain the coronavirus, President Trump signed an interim $484 billion coronavirus relief package on April 24, 2020.
The Paycheck Protection Program and Health Care Enhancement Act adds $310 billion in funding for the PPP, administered by the Small Business Administration (SBA), after the initial $349 billion allocated for the program ran out in less than two weeks. Businesses that are interested in applying for a loan through the PPP should talk to their lender as soon as possible. This second round of funding is likely to go even more quickly than the first.
Below is a summary of the key funding provisions in the act:
- $310 billion in additional funding for the Paycheck Protection Program
- $30 billion of the $310 billion will be earmarked to banks, credit unions and Minority and Community Development Financial Institutions with less than $10 billion in assets. Another $30 billion would be set aside for financial institutions with assets of between $10 billion and $50 billion.
- $60 billion for economic disaster loans ($50 billion in loans and $10 billion in grants)
- $75 billion for hospitals to help them cover costs associated with responding to the virus
- $25 billion for coronavirus testing
There was an initial learning curve for lenders and businesses alike when the PPP program was introduced. Now that banks have had a few weeks to learn the system and further streamline the loan application process, the process should be faster – consequently, the funds may be exhausted faster as well.
Small businesses should be aware that time is of the essence with applying for the PPP and other coronavirus-related loan programs. Don’t delay. Contact me or another Kaufman Rossin professional for assistance with navigating available government relief programs and other working capital options for your business.