New Stimulus Package Further Funds Small Businesses - Contact Your Bank Today
On Tuesday, April 21, 2020, the Senate passed the Paycheck Protection Program and Health Care Enhancement Act, a fourth coronavirus-related relief bill. The bill is awaiting approval in the House, however, no significant changes are expected.
Banks are already indicating that these new PPP funds will be allocated within the next couple of days. If you have applied for a PPP loan, we recommend contacting your bank to ensure your loan information is complete and you are in the best position to obtain funding when it becomes available.
If you’ve already received PPP funds and you need assistance with PPP loan forgiveness, click here.
Despite the last stimulus package, the Coronavirus Aid, Recovery, and Economic Security (CARES) Act, being the most expensive piece of legislation passed by Congress, it still wasn’t enough to quell the economic disaster created by the coronavirus. Three months after the first reported case in the United States, the pandemic continues to cause widespread financial damage.
This new stimulus package provides $484 billion in funding that is apportioned to further fund struggling small businesses and ensure greater access to testing. The new legislation replenishes the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), establishes funding for national coronavirus testing, and sends financial aid to struggling hospitals.
Some of the key components of the new legislation include:
An additional $310 billion for the PPP
The additional funding for the PPP is perhaps the most highly anticipated aspect of this new stimulus package. The PPP is a loan program created by the CARES Act to provide financial relief for small businesses through a forgivable loan (with some stipulations and restrictions). The CARES Act originally funded the PPP with $350 billion and authorized banks to distribute the loans in coordination with the SBA, intending for the funding to provide individual loans to the small businesses that needed it most.
$60 billion for disaster-related loans and grants (EIDL)
The new legislation establishes an additional $60 billion for the SBA’s disaster relief fund and expands eligibility to include farms and other agriculture enterprises. The package also provides $10 billion for Emergency Economic Injury Disaster Loan grants and $50 billion for disaster recovery loans, as well as $2.1 billion to cover the additional salaries and expenses these programs have created for the SBA.
$75 billion to hospitals
This additional funding for hospitals and healthcare providers aims to provide relief from the new expenses created by the pandemic as well as the lost revenue from widespread cancellations of elective procedures.
$25 billion for testing
The $25 billion in funding for COVID-19 testing is intended to stimulate the development, validation, manufacturing, purchasing and administration of new tests nationwide. While the new legislation generally does not provide additional funding to states and local governments, $11 billion of the funds for testing are earmarked for helping states to expand lab capacity.
Other than the funding to help expand states’ testing efforts, the new stimulus package does not include additional funding for states and local governments. Recent comments from the President suggest that more funding for states and localities that have lost revenue due to the pandemic could be included in yet another stimulus package in the future.
Aprio’s team of expert advisors are continuously monitoring new legislation as well as any accompanying guidance from the IRS. If you are struggling to weather this crisis, or if you’re unsure how to best utilize or access the new funding that may be available to you, reach out to your Aprio Relationship Partner or contact us here.