More Funds to be Freed For PPP and EIDL
With the imminent passage of the additional $484 billion relief package a few days away we thought it would be important to provide an update on its contents and describe how it will affect you. Following are the highlights:
$310 billion will replenish the Paycheck Protection Program (PPP).
- Of the $310 billion, $60 billion will go to community banks
- The remaining $250 billion will go to large banks like Bank of America, JP Morgan Chase, Wells Fargo, and Citibank
$60 billion will be allocated to extend the Economic Injury Disaster Loan (EIDL) program.
- $50 billion towards the loans
- $10 billion towards the grants
The rest of the funds are being allocated to hospitals and for the mass production testing for the virus.
So how does all this affect you:
1. I have already made a PPP application and I have been funded. What do I do?
Nothing! You should now be turning your attention to spending the money in the most efficient way that allows you to claim as much as possible as is forgivable. We will be sending more on this shortly.
2. I have already made a PPP application and was not funded. Do I have to reapply?
No you don’t. Most of the financial institutions were in the process of working through the applications they received when the money dried up. Some institutions have been better than others in giving appropriate feedback to applicants. It is our understanding that most of the large institutions stopped taking applications but continued the process of vetting them. When the next wave of funding arrives those applications are still live and should be processed depending upon where they stand in the queue. We advise you to contact your bank officer if you have one or the general numbers provided to review your status.
3. I made an application and was very disappointed in how my bank handled it. Do I have any alternatives?
Yes you do although they are currently limited. As stated above, most major financial institutions closed down the ability to make applications. Some secondary lenders are available where you can make another application. You are not precluded from making another application but you cannot take more than one loan. We have a number of clients who are frustrated with their experience with their lead bank and have made additional applications elsewhere. The experience from bank to bank is truly head scratching and maybe you will find someone who knows what the hell they are doing.
4. I have not yet made an application. Can I still?
Yes you can, and we urge anyone who qualifies to do so. Again, unfortunately right now, your options are limited, but you should check in with your financial institution and see where their process is and whether they will be taking new applications with the new wave of funding coming. If they will not, then you should turn to a secondary funder. There are a number out there and we have a limited list we can share with you. Contact us for that list. Please be careful there are already reports of scams relating to this program.
Also we believe it is important to note that sole practitioners and entrepreneurs are not precluded from applying for the PPP program even if you do not have payroll. Net income will be substituted instead at the maximum rate of $100,000 per annum.
5. What’s going on with the EIDL Grant and Loan program.
The SBA has temporarily taken down the link to make these applications. But with the additional funding it should reopen. As with the PPP program, if you have already made an application there is nothing for you to do but wait. For those of you who did not make this application yet continue to check the SBA disaster loan website. http://www.SBA.gov/disaster
We will continue to keep you informed to the best of our ability over the coming days….and also for the probable Round 3.
The Partners and Staff LHF