On Friday, April 25, 2020, the Paycheck Protection Program and Health Care Enhancement Act was signed into law, which increased the amount of funds available for the original Paycheck Protection Program by 310 billion dollars.
With businesses seeking financial relief at an all-time high, the second round of distributing and accessing the newly replenished funds has proven to be just as challenging as the first. The main problem is accessing the SBA loan processing system, which is unable to handle the volume of loan applications. Business owners seeking aide continue to run into an overloaded and unstable system.
The SBA has not released an official statement on the technical difficulties associated with the loan processing system, but they are expected to provide more guidance this week. No announcement was made from the SBA on how many loans were processed yesterday. However, the administrator of the SBA, Jovita Caranza, tweeted that as of 3:30 p.m. on April 27, the SBA had processed more than 100,000 PPP loans submitted by more than 4,000 lenders. As expected, replenished funds will be exhausted very quickly.
More information on fees, loan forgiveness, and other critical issues is expected to be released in the following days and weeks from the U.S. Treasury and the SBA. If your original PPP loan was denied, call your bank today and ask when and if your funding request will be re-reviewed. Business owners may find better options with local banks and credit unions applications than those from big banks. In the meantime, here are a few updated resources regarding the PPP rules.
Program Rules from the U.S. Treasury
- Frequently Asked Questions (4/26/2020)
- Interim Final Rule 1 (4/2/2020)
- Interim Final Rule on Applicable Affiliation Rules (4/3/2020)
- Interim Final Rule on Additional Eligibility Criteria and Requirements for Certain Pledges of Loans (4/14/2020)
- Interim Final Rule on Requirements for Promissory Notes, Authorizations, Affiliation, and Eligibility (4/24/2020)
- Interim Final Rule on Additional Criterion for Seasonal Employers (4/28/2020)
Paycheck Protection Program Guidance from the U.S. Small Business Association
Aldrich is Here to Support You
Your Aldrich Advisor is here to help you navigate the options to keep your business afloat during these rapidly changing times. Please reach out to your advisor to discuss what the specific implications may be to you and your business. For more resources to help you stay up-to-date on the developing impacts of coronavirus on your business, visit our COVID-19 Resource Center.
This article was last updated on April 28, 2020, with the available guidance from Treasury Department FAQs and SBA Interim Final Rules. As ambiguity remains in some of the rules, please consult your advisor for additional advice on this topic.