UPDATE 4/24 - Additional $310B in Financial Relief for Small Businesses Passes; Updated Application Form Here
Update 4/24: On Friday, the House passed the bill and President Trump signed it into law. For information on how to apply for funding, visit our Paycheck Protection Program information page or click here for the most updated application form. The original version of this story follows below.
The Senate on Tuesday voted to approve almost $500 billion in additional relief to supplement the Paycheck Protection Program. The package includes hundreds of billions of dollars in new financial relief for small businesses impacted by COVID-19.
The legislation, which the House is expected to vote on tomorrow, also includes financial assistance for hospitals and an increase in COVID-19 testing.
Included in the $310 billion set aside for the Paycheck Protection Program is $60 billion for smaller banks and financial institutions and “credit unions with assets less than $10 billion.”
There also will be an additional $10 billion in grants available under the emergency Economic Injury Disaster Loan (EIDL) program, $50 billion in recovery loans and $2.1 billion to aid with salary an expense payments for the Small Business Administration, according to a copy of the legislation published by CNN.
As with the original round of Paycheck Protection Program funding, the small business loans included in the relief package, which are designed to keep employees on the payroll even when the businesses are shut down, are forgivable as long as businesses use the money for wages, benefits, rent and utilities.
While Democratic and Republican lawmakers negotiated into the wee hours of the night to come to an agreement, Senate Minority Leader Chuck Schumer admitted that one desired outcome—more money for state and local governments—wouldn’t come to fruition. He told CNN, however, that the Democrats “did get a commitment from the White House that they would be able to use those funds for lost revenues,” and that the Democrats would push for more state and local funding in a separate relief package in the future.
If not marked as a full win by either party, this at least is a milestone at a time where the financial relief was desperately needed, as last week the Small Business Assistance fund was depleted as lawmakers hammered out details for another round of financing.
One of the hangups in the negotiation process, according to CNBC was the Democrats’ push for more money allocated for rural and minority-owned small businesses, as well as more money for SBA disaster assistance loans and grants.
Additional legislation regarding financial relief for small businesses could include pushes for extending unemployment insurance passed in March and increased protections for essential workers who still have to report to their places of business.
The president tweeted yesterday that he hopes future financial legislation would include financial assistance to state and local governments to make up for lost revenues and tax incentives for businesses forced to suspend operations.
....to State/Local Governments for lost revenues from COVID 19, much needed Infrastructure Investments for Bridges, Tunnels, Broadband, Tax Incentives for Restaurants, Entertainment, Sports, and Payroll Tax Cuts to increase Economic Growth.
— Donald J. Trump (@realDonaldTrump) April 21, 2020
One complaint, however, is that an disproportionate amount of funding was allocated to large restaurants, rather than small businesses truly struggling to stay afloat. At least one company has taken honest action: Shake Shack returned the $10 million loan intended for small businesses, providing that money for other small businesses who need the money more right now.
With both parties at odds over what should and shouldn’t be included in legislation, there’s a chance partisan fighting could elongate the process for further financial assistance.