When the federal government announced the Paycheck Protection Program (“PPP”) several weeks ago, making available $349 billion for loans to small businesses impacted the COVID-19 health crisis, borrowers scrambled to submit loan applications in accordance with the “first-come, first-served” process. On April 16th, PPP funds were depleted, leaving many small businesses empty-handed. In response to the continued need, the government has approved additional funds for both the PPP and the SBA’s other loan program that can be used to reduce the impact of COVID-19, the Economic Injury Disaster Loan Program ("EIDL Program”).
As of April 24th, the following funding has been added to each program:
- An additional $310 billion under the PPP, supplementing the first round ($349 billion) of PPP funding that was exhausted.
- $60 billion of the above-referenced $310 billion has been earmarked for loans made by certain small banks, credit unions and community-based lenders. Specifically, $30 billion is being reserved for lenders with assets between $10 and $50 billion, and another $30 billion is being reserved for lenders with assets under $10 billion, including certain community development financial institutions and minority depository institutions.
- An additional $50 billion under the EIDL Program, which recently stopped accepting additional applications.
- An additional $10 billion for forgivable "advances" (up to $10,000 per advance) under the EIDL Program, supplementing the first round ($10 billion) of special funding for these advances under the CARES Act.
Since our last blog on this topic, the Treasury Department has also issued more guidelines and information on the PPP:
- An additional rule about eligibility that focuses on self-employed individuals, partnerships and LLCs.
- An additional rule clarifying promissory note requirements, eligibility of certain types of businesses, affiliation criteria, and certification of the need for a PPP loan.
- Updated FAQs adding additional answers to questions about the PPP.
- A loan report providing detailed information about loan amounts, locations, industries, lenders and other public information (last updated April 16, 2020).
As always, we are happy to assist you with any aspect of the government’s relief assistance provided for under the CARES Act, including the PPP and EIDL programs. Please contact Michael Cashton at firstname.lastname@example.org or (401) 744-9647 or visit our website’s Contact Us page.
Michael Cashton is a member of our New England-based team and brings over 20 years of experience representing emerging businesses, major corporations, and individual entrepreneurs across a range of industries, including consumer goods, SaaS/PaaS, ad-tech, digital gaming, e-commerce, retail, food service, and arts/entertainment. Before joining Outside GC, Michael served as VP of Legal for Habsro, Inc., an international consumer products and branded entertainment company. He can be reached at email@example.com or 401-744-9647.