Additional Paycheck Protection Program Funding Approved by Congress, Awaiting President’s Signature
A new coronavirus (COVID-19) stimulus bill entitled the “Paycheck Protection Program and Health Care Enhancement Act’’ was passed by Congress on April 23, 2020 and presented to President Trump for signature. The President has indicated he will sign the bill into law. The law will include over $300 billion of additional funding to restart the Paycheck Protection Program (PPP) and an additional $10 billion for the Small Business Administration (SBA) economic injury disaster (EIDL) loans. Both the EIDL loans and PPP were very popular; the PPP quickly oversubscribed its initial appropriation. It is expected that the new appropriation will be committed within a matter of days.
In an effort to make PPP accessible through smaller borrowers and lending institutions, the law allocates $60 billion of the total PPP funding to lenders having less than $50 billion in assets, and $30 billion of that amount to lenders having less than $10 billion.
No changes were made to the rules and regulations governing PPP. As with the initial appropriation, PPP loans are made to small businesses to enable them to maintain staff on payroll and pay for other overhead expenses. If the proceeds are properly used, the loans may be forgiven.
Small businesses which did not apply for PPP participation before the prior appropriation was exhausted, or which applied but did not receive approval, now have another chance to participate in the program.
Businesses which applied for PPP but were not approved should immediately contact their lenders for advice as to whether their existing applications need to be updated or resubmitted. Businesses which did not apply should promptly reach out to their lenders for instructions on how to submit an application.
While we await guidance from SBA, it is likely that the funds again will be made available on a “first-come, first-served” basis and that the new funds will be exhausted within a few days of authorization.
The application process is straightforward but the rules for eligibility, use of proceeds and forgiveness are complex. Please contact Douglas Watson Lubic, Peter Greenbaum or any member of our business law or commercial finance teams for assistance.
The postings on this blog were created for general informational purposes only and do not constitute legal advice or a solicitation to provide legal services. Although we attempt to ensure that the postings are complete, accurate, and current as of the time of publication, we assume no responsibility for their completeness, accuracy, or timeliness. The information in this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel.
This blog may contain links to independent third party websites and services, including social media. We provide these links for your convenience, and you access them at your own risk. We have no control over and do not monitor the content or policies (including privacy policies) of these third-party websites and have no responsibility for, and no liability with respect to, their content, accuracy, or reliability. Unless expressly stated, we do not endorse any of the linked websites or any product, service, or publication referenced herein or therein. We will remove a link to any site from this blog upon request of the linked entity.
We grant permission to readers to link to this blog so long as this blog is not misrepresented. This site is not sponsored or associated with any other site unless so identified.
If you wish for Wilentz, Goldman & Spitzer, P.A., to consider representing you, please obtain contact information from the Contact Us area of this blog or go to the firm’s website at www.wilentz.com. One of our lawyers will be happy to discuss the possibility of representation with you. However, the authors of Wilentz blogs are licensed only in New Jersey and/or New York and do not wish to represent anyone who viewed this site in a state where the site fails to comply with all laws and ethical rules of that state.