The Paycheck Protection Program continues to fund businesses across the country as they weather the economic uncertainty caused by the coronavirus outbreak. Last week, additional funding was signed into law to restart the program. Also, last week, new eligibility guidance was issued.
Here are the details you need to know about both.
Additional PPP Funding to Restart the Program
Last Friday, April 24th, President Trump signed into law the Paycheck Protection Program and Health Care Enhancement Act, which provides an additional $310 billion in funding for the PPP. Of this new funding, $60 billion is specifically designated for use by smaller banks and credit unions, ensuring that borrowers who apply to small and mid-sized lenders aren’t at a disadvantage. This may help smaller businesses, who are more likely to seek help from smaller lenders.
The additional PPP funding is good news for companies who desperately need these funds to stay afloat during the COVID-19 economic crisis. If you’ve already submitted your loan application, there is no need to resubmit one to the same lender.
Treasury Issues Updated Eligibility Guidance
Last Friday, April 24th, the Treasury issued its 4th interim final rule. This guidance addresses PPP eligibility issues that are now relevant due to the new funding, with a few essential areas highlighted below.
- Hedge funds and private equity firms are not eligible for PPP loans.
- Hospitals, regardless of ownership by state or local government, are eligible for PPP loans if the hospital receives less than 50% of its funding from state or local government sources, not including Medicaid.
- Businesses who are involved in a bankruptcy, whether during the time of loan application or any time before loan disbursement, are not eligible for PPP loans.
Have More Questions about the PPP? We Have More Answers
If you have been approved for your PPP loan, you likely have a handful of new questions, like what is forgivable and how should you account for these loans? Check out our blog posts below for further insight.
As always, we are here to make the complex simple. Please reach out to us if you have any further questions or visit our COVID-19 Resource Center to keep up with our latest updates and resources.