As expected, President Trump approved the second round of funding under the CARES Act on Friday, April 24, 2020, which is set to become active on April 27 at 10:30 am. The new $484 billion package allocates $370 billion to the Paycheck Protection Program (“PPP”), which provides loans to qualifying small businesses. $60 billion of this funding will go specifically towards loans to smaller lending facilities and minority-owned businesses. The SBA Economic Injury Disaster Loan (EIDL) program will receive an additional $10 billion in funding under the new package.
There are still pending PPP applications from the first round of funding. Those applications are expected to be processed prior to new applications. While this new funding is expected to run out quickly, it is still important for small businesses who need a PPP loan to apply as soon as possible. Applications are processed on a first come, first served basis so the sooner an application is submitted, the higher position it will hold in line. Businesses may also apply for a EIDL loan to help with ongoing expenses that may not be covered under the PPP for forgiveness purposes.
While nothing beyond this round of funding has been confirmed, it is expected that there will be additional support for small businesses in the future due to demonstrated constant and widespread need. If that additional support is in the form of another stimulus package, current applicants who do not receive a loan under the new package will have their applications processed before new applications under future packages.
Not every lender has been approved to issue PPP loans. If you’re planning to submit an application for a PPP loan, call your lender ahead of time and confirm whether they have been approved.
