Updated as of April 24, 2020
After the last coronavirus relief bill for small businesses was depleted in just two weeks, the President has approved funding to replenish economic aid to small businesses adversely affected by the COVID-19 pandemic. The $484 billion coronavirus funding bill includes $370 billion in small business funding. Of that amount, $320 billion is allocated to replenish the Paycheck Protection Program (PPP), which provides forgivable loans to small businesses under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Loans granted through the PPP are allowing businesses to stay afloat and to keep employees on their payroll during this sharp economic downturn.
Congress also added $50 billion to the $10 million Emergency Injury Disaster Loan (EIDL) program, which was depleted when the Small Business Administration (SBA) received loan requests for more than $400 billion. Originally, businesses could apply for $10,000 in forgivable loans as an advance working capital loan. Given the great demand for EIDL loans, loans are now available for up to $2 million at an interest rate of 3.75% for small businesses and 2.75% for not-for-profits to be used for:
- fixed debts
- accounts payable
- other bills that cannot be paid due to the impact of a disaster
The interim relief bill also provides $10 billion for small business grants of up to $10,000 for disaster relief. To address the need for COVID-19 testing, the bill allocates $25 billion in funding for a comprehensive national testing program as well as $75 billion to hospitals and healthcare providers to assist with essential coronavirus expenses.
In our experience, we know that there will be a high demand for small business funds, and the demand will likely exceed the funds available. If you are planning to apply for a loan, we urge you to get your application in order now.
COVID-19 Resources and Planning Services
If your small business needs loan assistance during this challenging time, our COVID-19 Business Advisory and Planning Services Group is ready to assist you. We have had great success in helping clients get loans from a number of select banks. For help applying for a loan, email CARETEAM@GPPcpa.com or call GPP at 972-818-5300.
Note: This content is accurate as of the date published above and is subject to change, as definitions change. Please seek professional advice before acting on any matter contained in this article.