On April 24, the President signed the Paycheck Protection Program and Health Care Enhancement Act (the “Act”) into law. Among other things, the Act allocates over $300 billion to replenish the Paycheck Protection Program (“PPP”), including $60 billion specifically set aside for loans made by community-based banks and smaller lenders. The Act also increases Economic Injury Disaster Loan (“EIDL”) program appropriations by $50 billion, and EIDL grant program funds by $10 billion.
As a result of the Act, the SBA will resume accepting PPP loan applications on Monday, April 27, 2020 at 10:30AM EDT from approved lenders on behalf of eligible borrowers. The SBA has advised approved lenders to resume processing loan applications that were previously submitted by eligible borrowers as well as new applications, and to resume disbursing funds.
What does this mean for small businesses that already submitted PPP applications?
If you were approved for a PPP loan and received confirmation from your lender, you can generally expect to receive funds in approximately seven to 10 days. If you applied but are unsure if you were approved, follow up directly with your lender. Even if you were not approved in the first round of loans, many lenders have held on to applications, and plan to submit them when the program reopens up. Contact your lender with questions.
While it isn’t too late for business owners who haven’t yet applied for a PPP loan, note that there is high demand. Reach out to your lender as soon as possible to determine if it has the capacity to process your application.
“Current economic uncertainty” certifications
The SBA has also updated its FAQs to re-emphasize that PPP loan borrowers must make a good faith certification, taking in to account their current business activity and ability to access other sources of capital or liquidity, that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” If a borrower believes it can no longer make this certification or otherwise comply with Treasury and SBA guidance, it may repay PPP funds to its lender on or before May 7, 2020, and the SBA will deem the borrower to have made the required certification in good faith.
Please note this current global emergency and applicable laws, regulations, proposals, guidance, advice, and responses change rapidly. We strive to keep you up to date as much as possible, but this blog article is intended for general informational purposes only and should not be construed as legal advice or opinion. Contact myHRcounsel with questions concerning specific facts and circumstances.