House Approves Additional Funding for Paycheck Protection Program
The U.S. House of Representatives passed legislation Thursday that will provide $370 billion in additional pandemic-relief funding for small business as part of a larger aid package. President Donald Trump is expected to quickly sign the $484 billion Paycheck Protection Program and Health Care Enhancement Act, which was approved by the Senate on Tuesday. Most of the small business funding, in the amount of $310 billion, will replenish the Paycheck Protection Program (PPP), which is administered by the U.S. Small Business Administration (SBA) and provides forgivable loans to certain types of businesses.
The $310 billion for the PPP includes $60 billion in loans to be made by small banks, credit unions, minority-owned banks, and other small lenders. Of that total: $30 billion is for loans by FDIC-insured banks and credit unions that have assets between $10 billion and $50 billion. An additional $30 billion is for lenders with less than $10 billion in assets. Those include community banks, credit unions, and community development financial institutions, which provide loans to low-income communities and to people who lack access to financing.
Another $60 billion in small business funds not included in the PPP program will go to the SBA’s Economic Injury Disaster Loan program, which provides working capital loans of up to $2 million that small businesses may use to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the impact of a disaster. The interest rate is 3.75% for small businesses and 2.75% for not-for-profits. Of that $60 billion, $10 billion will go to small business grants of up to $10,000 for disaster relief that do not have to be repaid.
Business owners should apply AS SOON AS POSSIBLE because these funds ran out in twelve days during the last round of PPP funding. The professionals at The Center for Financial, Legal and Tax Planning are more than well-equipped to answer your questions with regards to applying for the Paycheck Protection Program. Please contact us at (618) 997-3436 to setup a free consultation.