On April 24, President Trump signed into law a $484 billion stimulus package, including an additional $310 billion of funding for the Paycheck Protection Program (PPP), which ran out of funds earlier this month.
The U.S. Small Business Administration (SBA) resumed accepting Paycheck Protection Program applications from participating lenders today, April 27, at 10:30AM EDT. It is widely thought that this round of funding will be gone within 2 to 14 days.
This PPP and Health Care Enhancement Act is the second round of funding for programs initiated by Congress to rescue small business, health care and other communities from the financial downturn due to the coronavirus pandemic. Most of the small business funding, $310 billion, will replenish the PPP, which is administered by the 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. $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.