The Senate on Tuesday approved $370 billion in additional funding for small businesses through programs administered by the U.S. Small Business Administration (SBA) as part of a new COVID-19 pandemic relief bill.
The relief bill passed in the Senate and moves to the House, which will convene to consider the package, with a vote expected Thursday. President Donald Trump said in a tweet that he would sign the legislation.
The $484 billion bills also include an additional $75 billion for reimbursements to hospitals and health care providers to support the need for coronavirus-related expenses and lost revenue. Funding of $25 billion for coronavirus testing expenses also is included.
Most of the funds administered by the SBA, $310 billion, will replenish the Paycheck Protection Program (PPP), which provides forgivable loans to certain types of businesses struggling as a result of the pandemic.
The $310 billion for the PPP sets aside $60 billion in loans to be made by small banks, credit unions, minority-owned banks, and other small lenders. Of that total:
- $30 billion is for loans by FDIC-insured banks and credit unions that have assets between $10 billion and $50 billion.
- An additional $30 billion is for lenders with less than $10 billion in assets. Those include community banks, credit unions, and community development financial institutions, which provide loans to low-income communities and to people who lack access to financing.
Another $50 billion in small business funds not included in the PPP program will go to the SBA’s Economic Injury Disaster Loan program, which provides working capital loans of up to $2 million that small businesses may use to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the impact of a disaster. The maximum interest rate is 3.75% for small businesses and 2.75% for not-for-profits.
The SBA also will receive $10 billion for small business grants of up to $10,000 for disaster relief.
Most of the banks will be continuing to process the PPP so if your business has not submitted and if you’re self-employed you have not submitted it’s imperative that you submit now because most likely these funds will also be fully utilized in the very near term.
Our entire Team at MillerMusmar CPAs is here to help you navigate through these programs. Please contact us if you require our assistance.
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