Late yesterday, the House passed a nearly $500 billion coronavirus response package, which increases funding for the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) by $310 billion. The bill, which passed the Senate on Tuesday, also requires that $60 billion of the increased PPP loan level is reserved for loans to small businesses by smaller lenders, including credit unions and minority-owned banks.
The bill also includes another $50 billion for SBA Economic Injury Disaster Loans (EIDL) to help support emergency loans and an additional $10 billion for associated disaster grants to small businesses. The current package only addresses funding levels, not loan program changes or eligibility rules to receive a PPP loan. President Trump is expected to quickly sign the legislation into law.
The President and Congress are already focusing on a fourth phase of stimulus to address the economic carnage caused by the COVID-19 pandemic and the corresponding extended shutdowns of huge swaths of the U.S. economy.
While the next bill likely won’t be considered until late May or June, it is expected to be broader than the earlier stimulus efforts. There are likely to be efforts to create additional transparency for recipients of the existing PPP loans and there may be efforts to change the eligibility rules for small businesses to receive future PPP loans.
NADA and State associations across the country continue to strongly advocate for swift action to replenish PPP funding and the broadest possible business relief to help dealerships. There is also an effort to bring some assistance to State dealer associations by seeking additional relief for 501-c-6 organizations.
The SBA and Treasury Department also issued a joint statement on the resumption of the Paycheck Protection Program.
The two main items dealers should be aware of:
- The Small Business Administration will resume accepting PPP loan applications on Monday, April 27, at 10:30 AM EDT from approved lenders on behalf of any eligible borrower.
- When the door opens for new applications, applications previously submitted will be processed first.