Update 4/23/20: Businesses should act quickly to receive PPP funds.
Today, Congress is authorizing the second tranche of funding for the Paycheck Protection Program (PPP). The bill authorizes an additional $310 billion for PPP loans. President Trump is expected to sign the bill today, which would allow banks to begin submitting loan applications tomorrow.
The Consumer Bankers Association has said that with the current backlog of applications the funding could be gone in 48-72 hours.
It is very important for HARDI members and their customers to talk to their banks today about PPP loans and submit applications to receive funding from this tranche. Congress is not expected to authorize any additional funding until they return the week of May 4th, and negotiations for the next bill could take several weeks.
Update 4/22/20: An agreement for additional funding the Paycheck Protection Program and Economic Injury Disaster Loans has been reached between Congress and the Administration. This agreement sets up votes later this week in the Senate and House to pass the funding. We expect the funding to be signed into law by Thursday evening. The agreement includes:
- $310 billion for PPP, of which $60 billion is allocated to smaller lenders and the community financial institutions.
- $10 billion for EIDL advance/grant program
- $50 billion Disaster Loans Program Account to remain available until extended
- $75 billion for hospitals
- $25 billion for testing
- Of which $11 billion is for “states, localities, territories, and tribes to develop, purchase, administer, process, and analyze COVID-19 tests, scale-up laboratory capacity, trace contacts, and support employer testing. Funds are also made available to employers for testing.”
Once the bill is signed by President Trump, the Small Business Administration will quickly move to reopen applications. The Consumer Bankers Association expects the new funds to be exhausted in 48-72 hours.
Update 4/16/20: The Small Business Administration has announced the PPP fund is now depleted and no new loans will be authorized until new funding is appropriated by Congress.
Update 4/16/20: Senate Democrats again blocked an attempt by Republicans to pass additional funding through unanimous consent. The Senate will meet in its next pro-forma session on Monday, April 20. Due to the lack of agreement in negotiations between Secretary Mnuchin and Minority Leader Schumer, it is more likely that the full Senate will need to come back for a vote to pass the additional funding.
The Small Business Administration will soon stop accepting new loan applications for the Paycheck Protection Program. On March 27th, Congress appropriated $349 billion for the program and banks began distributing the money on April 3rd. In less than two weeks more than 1.5 million loans were given out to small businesses, with the construction industry receiving the most loans, including many HVACR contractors.
Once the PPP funds are exhausted, SBA will stop allowing lenders to send applications through the lender gateway. This means the SBA will not maintain a queue for PPP applications. However, once Congress appropriates more funding for the program, the lender gateway will reopen for applications, so it is important for businesses that have not yet applied for funding to still talk to their lenders about joining the queue within the local lender.
Contact Alex Ayers for more information or any questions.