Congress Approves Additional Funding for Paycheck Protection Program
The House of Representatives earlier today approved legislation to re-fund the Paycheck Protection Program (PPP). President Trump is expected to sign the legislation as early as this afternoon.
The Paycheck Protection Program and Health Care Enhancement Act infuses the PPP with an additional $310 billion in funding.
The program—established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law on March 27 and administered by the Small Business Administration (SBA)—was initially funded at $349 billion. Those initial funds ran dry on April 16, at which time the SBA ceased accepting new PPP applications. The appropriation of another $310 billion into the program will allow the SBA to begin processing and accepting pending and new applications from small businesses.
Under the PPP, any small business with fewer than 500 employees is eligible for a loan of up to $10 million. Loans are 100% forgivable so long as funds are used for approved expenses and employers do not terminate or cut the pay of employees.
SBA has clarified that the PPP is available even to ranchers who do not have employees. The USDA has provided guidance for sole proprietors, independent contractors and other self-employed individuals under the “Paycheck Protection Program” drop-down menu here.
While it is not immediately clear when the SBA will re-open the PPP, CCA anticipates that the program will go live again shortly after the legislation is signed into law. If your lending institution is still accepting applications, CCA recommends you submit your application without delay so that it is in the queue when the PPP goes live again. If your lender is not accepting applications at this time, CCA recommends you have your application and all supporting materials ready to submit once your lender begins accepting applications again.
There will be high demand for the additional $310 billion in loan funding, and the funds are likely to be depleted quickly. Many experts suggest that the PPP needs at least $1 trillion in total funding—and today’s action still falls at least $341 billion short of that total.
The Paycheck Protection Program Increase Act also infuses SBA’s Economic Injury Disaster Loan (EIDL) program with an additional $50 billion in funding. Importantly, the Act mandates that the EIDL program be available to agricultural enterprises as defined in the Small Business Act (“businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries”).
While the CARES Act reflected Congressional intent to make the EIDL program available to farmers and ranchers, SBA did not previously open the program to agricultural producers, requiring EIDL applicants to certify that “Applicant is not an agricultural enterprise (e.g., farm), other than an aquaculture enterprise, agricultural cooperative, or nursery.” Under the legislation passed today, agricultural enterprises will now be eligible for EIDL funds.
For more information on the PPP, EIDL, or other loans or financial assistance available to California ranchers, contact Kirk Wilbur in the CCA office.
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