Updated 04-30-20
Good news for those who missed out on the first round of Paycheck Protection Program (PPP) funding. On April 24, 2020, the “Paycheck Protection Program and Health Care Enhancement Act,” was enacted to provide, among other things, $310 billion in new second-round funding for PPP loans. The Small Business Administration has resumed accepting PPP loan applications as of Monday, April 27, at 10:30 a.m. EDT.
What does this mean for you? Because PPP loans are issued on a first-come, first-served basis, if your organization: (i) Did not receive a first-round PPP loan, (ii) Is in need of funding,[1] and (iii) Is eligible to participate in the PPP program, you should immediately contact your PPP lender.
The SBA is encouraging all approved lenders to process loan applications previously submitted by eligible borrowers that did not receive a first-round PPP loan, and to disburse funds for those loans “expeditiously.” Based upon this directive, many PPP lenders are prioritizing PPP loan applications. For example, some lenders have indicated that first-round PPP loan applicants that were previously assigned an official SBA (E-Tran) PPP loan number, but did not receive a PPP loan, now will be treated as already having secured an approved PPP loan—the funds for which will be disbursed without the need for further approval. Also demonstrating priority, previously completed PPP loan applications held by, and already approved by, lenders, but not submitted to the SBA in the first round of funding, were to be submitted by those lenders starting at 10:30 a.m. EDT Monday, April 27.
All eligible borrowers that need PPP funds and did not previously submit a loan application should work with an approved lender to apply immediately. New PPP loan applicants are urged by the SBA to carefully review PPP loan regulations and guidance along with the certifications required to obtain a loan. The SBA has provided step-by-step instructions by borrower type for calculating the maximum amount of a borrower’s PPP loan. In addition to the loan application, new PPP loan applicants should be prepared to submit all documentation required by the PPP and their lender.
The $310 billion in new PPP funding is part of the approximately $484 billion in total new COVID-19 aid, which also includes $60 billion in new funding for emergency disaster loans and grants, $75 billion in new funding for hospitals, and $25 billion for COVID-19 testing. Within the $310 billion of new PPP funding, $60 billion is earmarked for small lenders, including community banks.
If you have any questions about the new PPP funding or need further COVID-19 guidance, visit PYA’s COVID-19 hub, or contact one of our PYA executives below at (800) 270-9629.
Disclaimer: To the best of our knowledge, this information was correct at the time of publication. Given the rapidly developing situation, and with the possibility of new guidance being issued at any time, be aware that some or all of this information may change. Please visit PYA’s COVID-19 hub frequently for the latest updates, as we are working diligently to put forth the most current information as it becomes available.
[1] The PPP loan application, SBA Form 2483, requires several borrower certifications and discloses potentially severe sanctions that can result from a false certification. In connection with the certifications and sanctions, the SBA has issued an Interim Final Rule entitled “Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan Request” regarding the certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.
