By Justine Lara Konicki & Peggy Beistel
[UPDATED 4/23/2020 @ 6:20 p.m.] In a 388-5 vote, the House has passed expanded funding for the SBA’s Paycheck Protection Program. The $484 billion relief package would replenish the PPP small-business loan program, provide aid to hospitals and give funding for coronavirus testing.
After being held up due to partisan gridlock, Congress and the Trump administration announced that they have finalized a $484 billion package that will inject much needed capital into the now-exhausted Paycheck Protection Program (PPP). The Senate passed the bill Tuesday afternoon, and the House could approve it as early as Thursday.
The interim spending bill includes an additional $310 billion for the Paycheck Protection Program, which ran out of its funding – originally $349 billion – last week.
Of the funds allocated for the PPP, $60 billion will be set aside for small businesses or businesses that do not have an existing banking relationship. Specifically, the bill sets aside $30 billion for banks and credits unions (less than $10 billion in assets) and $30 billion for “community financial institutions,” which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions and certain development companies that are qualified under the SBA’s lending program. CDFIs are community based institutions that have a primary mission of promoting economic development to those historically underserved by traditional financial institutions. This $60 billion was allocated amid reports that very small, minority and women-owned businesses were being shut out of the PPP application process.
The PPP continues to be a “first come, first served” program and even with this injection of funds, it is anticipated that the program will once again be oversubscribed. Accordingly, any business that qualifies for PPP should contact their bank, credit union or other qualified financial institution as soon as possible to obtain an application and instructions. Additionally, KJK has released a number of resources concerning PPP, including articles on what small business should know about how the program works, how to apply and how to prepare for forgiveness.
If you have any questions or would like to discuss further, please reach out to Justine Lara Konicki (email@example.com; 216.736.7211) or Banking & Finance Chair Anne Corrigan (firstname.lastname@example.org; 216.736.7227).