Small Business Administration Resumes Paycheck Protection Program
On April 24, 2020, Congress approved the Paycheck Protection Program and Health Care Enhancement Act, which provided an additional $310 billion in funding for the Paycheck Protection Program (PPP), created to provide needed capital to businesses during the COVID-19 pandemic, after the initial $349 billion of allocated funding ran out. Later that day, the Small Business Adminstration (SBA), the institution overseeing the PPP, announced that it would resume accepting applications for the Paycheck Protection Program on April 27th.
Critics of the original funding package, established as part of the CARES Act, argue that funding was inappropriately given out by large banks to large corporations who had access to other funds. As a result, some recipients have chosen to return their PPP funds, and on Thursday, April 29, the SBA and the Treasury Department issued a joint statement announing dedicated hours on April 29th for small businesses to submit applications before the system would open to all eligible companies. They also issued the following statement regarding the distribution of further funds:
“We have noted the large number of companies that have appropriately reevaluated their need for PPP loans and promptly repaid loan funds in response to SBA guidance reminding all borrowers of an important certification required to obtain a PPP loan. To further ensure PPP loans are limited to eligible borrowers, the SBA has decided, in consultation with the Department of the Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender’s submission of the borrower’s loan forgiveness application. Regulatory guidance implementing this procedure will be forthcoming.”
Companies intending to apply for funds through the PPP are urged to contact their banks as soon as possible for information on how to apply.
An FAQ document for the Paycheck Protection Program, currently updated as of April 29th, can be found at: https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf