On April 23 Congress passed a re-funding of the CARES Act, providing additional money for hugely sought aid by businesses nationwide. The Paycheck Protection Program (PPP), one of the programs being replenished, saw the initial $349B appropriated to it run dry less than two weeks after applications were made available to businesses. The PPP and other federally backed loans are life-preservers for businesses across the country as the economic impact of the COVID-19 pandemic continues to be felt.
This legislation does not consist of new programs; rather, it provides additional clarification and, importantly, additional funding. It has earned the moniker of “COVID Relief 3.5.” Here’s what is in the bill:
- $470 billion in overall spending
- $310 billion to the PPP to allow more businesses to receive funds
- $250 billion unrestricted
- $30 billion for Insured Depository Institutions and Credit Unions with assets between $10 – 50 billion
- $30 billion for Community Financial Institutions, Insured Depository Institutions and Credit Unions with assets less than $10 billion
- $50 billion to the SBA’s Economic Injury Disaster Loan (EIDL)
- $10 billion for EIDL grants
- $75 billion for hospitals
- $25 billion for testing
- $11 billion to assist local governments with testing needs
- $825 million for Community Health Centers and rural health clinics
This significant supplementary funding is necessary to undergird the economic losses caused by the pandemic. The additional money to the PPP will be helpful to many companies but will likely run out before the PPP application period closes on June 30. BRAC encourages businesses that would like to take advantage of a PPP loan to submit their applications as soon as possible. The SBA maintains a database of eligible lenders, searchable by zip code, here.
With Stay at Home orders in place for most of the country, CARES Act funding newly replenished, and unemployment claims at astounding levels, how to restart the economy both safely and quickly is at the top of everyone’s mind. Congress has been clear that it expects more bills addressing economic and other consequences of the pandemic in the coming weeks or months.
BRAC will continue to monitor COVID-19 legislation and provide analysis. For updates on this and other business-related guidance, visit brac.org/recovery.
As BRAC’s Manager of Governmental Affairs, David Zoller is responsible for the organization’s governmental relations and advocacy efforts and managing other projects related to economic competitiveness and quality of life.