$484 Billion in Coronavirus Relief Funds Approved
On April 23, Congress approved a $484 billion bill designed in large part to replenish the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) programs. Initially, Congress earmarked $350 billion for PPP loans. It is expected that President Trump will sign the bill into law in the immediate future.
Since the CARES Act was passed in late March, the PPP proved wildly popular. By April 16, the funds set aside for PPP and EIDL loans were exhausted, and the Small Business Administration (SBA) was no longer accepting applications. Although funding has been exhausted, the SBA has guaranteed more than 1.6 million PPP loans.
Through the new bill, Congress looks to add an additional $310 billion for PPP loans, as well as $50 billion for the EIDL program and an additional $10 billion for Emergency EIDL grants. (The Emergency EIDL grant is an SBA grant of $1,000 per employee (up to a maximum of $10,000), which does not need to be repaid, and can be applied for as part of your EIDL loan application.)
I’ve applied but haven’t received my funding, should I re-apply?
No. Borrowers who have already applied should not re-apply for a loan.
PPP borrowers who have been approved will receive a confirmation from their lenders, and loan funds should be received within 10 days of the confirmation. PPP borrowers who have waited more than 10 days for their loan funds after receiving confirmation of their loan should contact their lenders.
EIDL borrowers will have to check online through their SBA application portal to see whether they’ve been approved and been given a loan number. Due to the millions of applications, the SBA has received for EIDL loans, the SBA is unable to follow up with each. However, approved borrowers should expect to hear from an SBA case manager to work out the EIDL funding details.
I’ve not yet applied, can I apply now?
The SBA is not currently accepting new PPP or EIDL loan applications. It is expected that the SBA will announce when it will begin accepting applications after the replenishment bill is signed into law. Many of the large lenders, such as JP Morgan Chase & Co., have such large backlogs that they’re announcing they will focus their efforts first on those pre-existing applications before shifting their focus to new borrower applications. On top of that, many banks are turning away applicants who are not their regular customers.
Borrowers who’ve yet to apply should first check that their bank is an SBA-approved PPP or EIDL lender. The SBA provides a searchable database of lenders on its website. Borrowers who are not currently banking with SBA-approved lenders may need to consider an online lender, like Paypal, Intuit, or Square.
As with the first round of loan applications, it is expected that funds will be exhausted within days. Loan applications need to be submitted as soon as possible. It is never too soon to start gathering the necessary documentation and begin working with lenders on completing applications so that they can be submitted as soon as the SBA starts accepting new applications.