Yesterday, April 21, the U.S. Senate approved another stimulus bill, which, if passed into law tomorrow as expected, will provide an additional $484b in economic aid to combat the novel coronavirus and related economic distress. It would replenish funds for business loans under the Paycheck Protection Program (“PPP”) and the emergency Economic Injury Disaster Loan Program (“EIDL”).
Of the new funding, $310b will replenish the exhausted PPP. In response to concerns that larger banks and larger businesses crowded out smaller enterprises in the first round of PPP lending, $60b of the new PPP funding will be reserved for small lenders, including community banks, credit unions, and other smaller and community financial institutions that have less than $10b in assets.
The new bill will also inject $10b more into the EIDL grants and $50b more into EIDL loans. It specifically opens eligibility for EIDL to agricultural enterprises.
The bill also adds an additional $100b for expanded COVID-19 testing, hospitals and healthcare providers, salaries. It appropriates further funds to cover the expenses of the Small Business Administration.
Even the increased funding that is expected to pass into law is unlikely to satisfy all the demand for loans to eligible businesses. Businesses that are still seek PPP or EIDL loans should act without delay after the bill signed into law. The backlog of PPP and EIDL loan applications will be processed before any new applications are accepted, but you want to get into the queue. Assuming funds remain, new PPP loan applications will then be accepted through eligible financial institutions (see the list of lenders here) and new EIDL applications will likely be available at https://covid19relief.sba.gov/#/.
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