Yesterday afternoon the President signed a nearly $500 billion coronavirus rescue package that delivers emergency aid to small businesses and hospitals after two weeks of negotiations between party leaders and the White House. The bill will provide an immediate $321 billion infusion for the Paycheck Protection Program, the small business rescue fund that ran out of money last week. The package also provides another $60 billion in economic disaster loans for small businesses, $75 billion in emergency relief for hospitals and $25 billion to ramp up coronavirus testing. The measure is the fourth in a series of coronavirus relief bills muscled through Congress in less than two months, totaling $2.7 trillion in federal funds to fight the pandemic.
The bill also includes another $50 billion for SBA Economic Injury Disaster Loans (EIDL) to help support emergency loans and an additional $10 billion for associated disaster grants to small businesses. The current package only addresses funding levels, not loan program changes or eligibility rules to receive a PPP loan.
The SBA will resume accepting PPP loan applications on Monday morning, April 27 at 9:30 a.m. from approved lenders on behalf of any eligible borrower. This will ensure that the SBA has properly coded the system to account for changes made by the legislation. Dealers who previously completed an application with their bank do not need to resubmit their application or submit new application, however, they should touch base with their bank regarding their application.
The SBA and Treasury Department also released an updated
earlier this week. The update adds a new question, "Do businesses owned by large companies with adequate sources of liquidity to support the business's ongoing operations qualify for a PPP loan?" The answer, in part reads "Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that 'current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.'"
Further guidance from the SBA on PPP loan forgiveness is expected next week.