POTENTIALLY GOOD NEWS -- PPP II
According to the Journal of Accountancy: The Senate on Tuesday approved $370 billion in additional funding for small businesses through programs administered by the U.S. Small Business Administration (SBA) as part of a new COVID-19 pandemic relief bill. The relief bill passed in the Senate and moves to the House, which will convene to consider the package, with a vote expected Thursday. President Donald Trump said in a tweet that he would sign the legislation. The $484 billion bill also includes an additional $75 billion for reimbursements to hospitals and health care providers to support the need for coronavirus-related expenses and lost revenue. Funding of $25 billion for coronavirus testing expenses also is included. Most of the funds administered by the SBA, $310 billion, will replenish the Paycheck Protection Program (PPP), which provides forgivable loans to certain types of businesses struggling as a result of the pandemic. The $310 billion for the PPP sets aside $60 billion in loans to be made by small banks, credit unions, minority-owned banks, and other small lenders. Of that total: $30 billion is for loans by FDIC-insured banks and credit unions that have assets between $10 billion and $50 billion. An additional $30 billion is for lenders with less than $10 billion in assets. Those include community banks, credit unions, and community development financial institutions, which provide loans to low-income communities and to people who lack access to financing. Another $50 billion in small business funds not included in the PPP program will go to the SBA’s Economic Injury Disaster Loan program, which provides working capital loans of up to $2 million that small businesses may use to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the impact of a disaster. The interest rate is 3.75% for small businesses and 2.75% for not-for-profits. The SBA also will receive $10 billion for small business grants of up to $10,000 for disaster relief. It was not immediately clear how long the $310 billion in new PPP funds would last. The initial $349 billion in PPP funding was exhausted after 12 days, and many banks involved in the program said in statements posted on their PPP webpages that they continued to work on PPP applications even after the SBA stopped accepting them for the first round. PNC Bank posted the following on its PPP page: “Unfortunately, with the significant volume of applications already submitted to PNC and other lenders, it is likely that not every qualified applicant will receive loan proceeds under the PPP even if Congress authorizes additional funding.” It was also not immediately clear if any changes would be made to the guidelines for PPP loan approval.