It’s Back: Another $380 Billion in Small Business Aid for Coronavirus Impacted Businesses

This is follow-up to our previous posts regarding the Payroll Protection Program.  The PPP is by far the easiest and most generous Federal loan/ grant to apply for so we will continue our focus on the PPP.

A second round of Federal aid – loans and potential grants – for small businesses impacted by the COVID-19 coronavirus shutdowns was passed by the House on April 23, and was signed into law today by President Trump.  As of this writing it looks like the aid (part of a broader $484 billion bill) will consist of $310 billion for the unique Payroll Protection Program (PPP) with its generous loan provisions which can be forgiven into a grant, and $60 billion for the Small Business Administration’s Economic Injury Disaster Loan program (EIDL).  Additionally, since these programs have been so necessary and drawn upon heavily, there is also talk of a third round of Federal assistance, details to be determined.

For now, this is a second chance for small business applications to be approved.  Further, there are requirements for a significant share of the PPP funds ($60 billion) to go to smaller businesses, and for smaller, medium, and community banks to participate in the review and grant of those loans.  For those businesses still needing relief, this could be a lifeline opportunity.  Note that these loans are again “first come, first served”, and that this round of funds is expected to be exhausted within 48 to 72 hours.  Additionally, the banks taking the applications and handling the loans may require a prior banking relationship and may have their own forms that will need to be filled out.  Accordingly, prompt contact with the selected bank and getting the required paperwork submissions to the lenders as soon as possible will be essential.  Tax returns and other financial records will likely be required.  For those, the general business and tax accountant for the business will likely be involved and may be very helpful through familiarity with the programs’ financial documentation requirements.

We can discuss and summarize the differences between the PPP and EIDL.  The EIDL or other SBA programs are better for certain businesses, particularly after the funds for the PPP are fully committed.  For example, a unique feature of the EIDL is that qualifying businesses can obtain a $10,000 up-front emergency advance on the loan.  We have reviewed the somewhat voluminous SBA resources and articles published on the CARES Act and can help counsel you on what may be best for your business.

For the PPP loans/ grants, the Payroll Protection Program Guide from U.S. Chamber of Commerce is a good overview.  We can provide you with a worksheet that is particularly helpful as a quick way to compute the maximum loan amount and the possible loan forgiveness amount.  As a spreadsheet, it shows at a quick glance the relationship between the information requested and how it affects those amounts.  After you have successfully obtained your loan, we can help you with checklists and guidance on the documents you will need for loan forgiveness.

If you would like more information on these programs or would like to discuss how they may be helpful to your situation, please contact us.