On April 24, 2020, President Trump signed the new “phase 3.5” emergency coronavirus relief package into law (the “Bill”). The Bill includes an additional $310 billion for the Paycheck Protection Program (the “PPP”). The PPP is a federal loan forgiveness program created under the CARES Act to assist small businesses struggling with payroll and operating expenses due to the economic fallout from the global COVID-19 pandemic. Though initially funded with an unprecedented $350 billion, the PPP is a “first come, first served” lending program and quickly ran out of funds within a matter of two weeks.
Banks may begin accepting PPP applications again as early as next week and if you missed out on the initial round of funding, it is crucial that you prepare for the new round of funding before the well runs dry. Notably, the Bill has specifically earmarked $60 billion of the new PPP funds for distribution by small credit unions and community banks. This is good news for the smallest of small businesses that struggled to obtain loan proceeds through big banks during the first round of funding.
For more information about whether your business qualifies for financial assistance under the PPP, see our previous blog on the topic or reach out to one of our business law experts for advice.
