President Trump has today (April 24, 2020) signed the Amendment (passed last evening by Congress), which will provide $484 billion in additional funding to the Paycheck Protection Program (PPP) , the Economic Injury Disaster Loan (EIDL) program and several other new provisions. The Amendment provides the following:
- The Lender-administered PPP loan will have additional funding of $310 billion. Of that new funding, $30 billion is earmarked for smaller community banks, minority depository institutions and credit unions with net assets between $10 billion and $50 billion. An additional $30 billion is earmarked for very small community banks, minority depository institutions and credit unions with net assets less than $10 billion.
- The Amendment establishes a new qualifying class of businesses that includes agricultural enterprises engaged in the production of food and fiber, ranching and raising of livestock, aquaculture and all other farming and agricultural related industries with employee counts of less than 500 employees. Previously, there had been questions as to whether or not those enterprises would be eligible.
- The SBA-administered EIDL program received $10 billion of new funding for emergency grants and $50 billion of new funding for EIDL loans.
- The Amendment also includes $75 billion of funding for hospitals and healthcare providers engaged in COVID-19 activities and $25 billion of funding for COVID-19 testing and federal oversight.
This Amendment provides much-needed funding to two very popular CARES Act programs that ran out of funding in 14 days. Applicants that were prevented from filing loan requests, or had those requests in the queue, are now able to go back to Lenders (for PPP loans) and the Small Business Administration (SBA) (for EIDL grants and loans) to apply once again.
Coupled with what GHJ believes may be significant early repayments of loans because of new guidance recently provided regarding eligibility requirements (See GHJ blog dated April 23, 2020 entitled “PPP Update on Qualification Eligibility”), there may be sufficient funding for the programs to meet significant small business demand. As noted in the blog, it is critical for new applicants and those with applications already filed to consider these eligibility requirements.
For larger companies that determine eligibility or reconsider their eligibility, guidance will need to be provided by the Federal Reserve on its Main Street Loan program announced two weeks ago, as it will be an attractive program for such companies.
Please reach out to GHJ’s COVID-19 Resource Team if you have any questions specific to your businesses on the PPP loan, CARES Act or any other COVID-19-related legislation or issues.