As previously reported by Michelman & Robinson, the Small Business Administration’s $349B Paycheck Protection Program (PPP) has officially run out of funds, meaning the money provided under the CARES Act primarily for small business relief has been fully allocated. In response, congressional leaders have been working to hammer out a plan to inject more money into the PPP, and it looks like they have successfully done so.
Today, the Senate approved a deal approaching $480B that renews funding for the PPP to the tune of $310B and earmarks an additional $75B for hospitals (this on top of the original $100B for hospitals under the CARES Act), $25B for COVID-19 testing ($11B of which goes to states), and in the neighborhood of $60B for grants and disaster loans under the Economic Injury Disaster Loan Program. What is not included in the latest stimulus package is funding for state and local governments. Of note, some of the PPP money—$60B to be exact—will be specifically set aside for lending by small- and medium-sized financial institutions, and provisions of the legislation require participation by lenders serving minority or under-served areas.
Now that the Senate has passed the bill, the hope is for the House of Representatives to vote on it on Thursday, followed immediately by the President’s signature, in which case the PPP could be back in business by Friday or early next week. Of course, we will have to wait and see if that timeline holds true.
For small businesses, the boost to the PPP cannot come soon enough. Though approximately 1.6M PPP loans have been made thus far, there are at least 30M small businesses operating in the U.S., with many of those vying for a much-needed lifeline from the federal government.
This blog post is not offered, and should not be relied on, as legal advice. You should consult an attorney for advice in specific situations.