On April 24, 2020, Congress passed, and President signed, an additional $310 Billion of funding to replenish the Paycheck Protection Plan (PPP) after the initial $350 billion of the program’s funding was exhausted. Applications for new funding will be accepted on April 27, 2020. While the PPP program was lauded by businesses and the public at large, the roll out of the program has been criticized as providing PPP funding to large well capitalized businesses with access to the financial resources to keep them afloat during COVID-19 shutdown. The programs rules were lax enough to permit PPP loans to be issued to publicly traded companies with excess cash on hand, including to Ruth’s Chris Steakhouse ($20 million PPP loan), Shake Shack ($10 million PPP loan) and Potbelly ($10 million PPP loan). Within the initial thirteen days of accepting applications, PPP funds were exhausted without providing the small businesses with the funding that was intended to help those businesses survive COVID 19 shutdowns and stay at home orders.
In order to correct the criticism of the allocation PPP funds, the second round of funding for the PPP has targeted small businesses as beneficiaries by setting aside $30 billion of funds for community development, financial institutions, banks and credit unions with less than $10 billion in assets, and an additional $30 billion banks and credit unions with assets between $10 billion and $50 billion in assets. As an additional protective measure, businesses applying for PPP loans must now certify that the loans are necessary and that do not have access other sources of funding to continue to make payroll and pay other business expenses during the COVID shut down.
In addition to the $310 billion allocated to the PPP, an additional $60 billion has been allocated to the Economic Injury Disaster Loan and Grant program, of which $50 billion will be directed to EIDL Loans and the remaining $10 billion will go towards EIDL Grants. For more information regarding the PPP Loans and EIDL Loans and Grants for small businesses please see this link: https://astorweiss.com/covid-19-financial-relief-available-to-small-businesses-2/
The attorneys at Astor Weiss’ Business Law Practice Group are here to help your company with any questions you may have about federal loan programs to get your business through these difficult times. Anyone with questions about how their business may benefit from the Paycheck Protection Program, the Economic Injury Disaster Loan program, or any other federal or state business assistance programs should contact one of the attorneys in this group, whose contact information is listed below:
|David Mandel, Managing Partner||Therese Allison, Associate|
|Office: (215) 790-0100||Office: (215) 790-0100|
|Direct: (215) 893-4959||Direct: (215) 893-4971|
|Direct Fax: (215) 400-2255||Direct Fax: (215) 400-2241|
|Email: [email protected]||Email: [email protected]|
|Stephen Green, Of Counsel|
|Office: (215) 790-0100|
|Direct: (215) 751-1920|
|Fax: (215) 790-0509|