The initial Paycheck Protection Program well ran dry. Congress and President Donald Trump approved $310 billion in additional funding for the program. It’s now called the PPP and Health Care Enhancement Act.
In addition to the $310 billion, $60 billion has been added for the Economic Injury Disaster Loan program. Another $10 billion will be used for $10,000 grants.
PPP Program Refunded – Here’s What to Do Next
Here’s how to get your hands on the money.
Not every bank is participating in the PPP. Only banks set up to administer funds through the Small Business Administration are involved with the PPP.
Don’t wait. The first round of funding for PPP didn’t last long. Only $60 billion out of the $310 billion will go to small lenders. A small lender is defined as a bank with less than $50 billion in assets. This definition would fit most small and mid-size community banks and credit unions.
What if you applied for funds during the first round but didn’t get any money? Will your first application automatically be considered?
Some banks are processing applications in the order that they were received. That’s not a given, so contact the bank as soon as possible to doublecheck.
Some SBA participating banks are still processing applications from the first round. Those banks aren’t accepting new applications.
Be ready to apply to a different bank. The SBA website has a list of participating banks.
Ducks in a Row for Your Application
When you apply for the PPP, you’ll need tax returns from 2018 and 2019, if you’ve submitted for 2019. You’ll need payroll records.
You’ll need any legal documents related to the organization of your company. You’ll also need to prove that your business has been affected.
How Much Can You Get?
That formula didn’t change from the first round. A small business is defined as one with up to 500 employees. The business can receive 2.5 times its monthly payroll cost.
The PPP loan can be forgiven if the small business uses at least 75% of the money for payroll. The money can also be used to pay rent, utilities and interest on mortgages.
What’s the Economic Injury Disaster Loan Program?
You may have heard of the EIDL program weeks ago. It was on hold and reopens April 27. You apply through the Small Business Administration.
The EIDL has two parts. Of the $60 billion for the program, $50 billion is for EIDLs of up to $2 million each. The remaining $10 billion is for individual small business $10,000 forgivable loan advances.
For example, let’s say a small business is able to get an EIDL. The loan may include an advance amount of up to $10,000.
The advance monies of the loan are forgivable. The remainder of the loan must be repaid. The interest rate and repayment terms are good.
Can you get a PPP loan and a EIDL loan? No. You can’t get both.
The maximum loan is $2 million. The SBA has greatly streamlined the EIDL application process. It should take about 2 hours to apply. The loan advance could come to you as quickly as 48 hours.
Whether your EIDL is approved or not, the advance does not have to be repaid.
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