Small Business Funding Agreement Reached by Congress and Treasury

Today Treasury Secretary Steven Mnuchin and Congressional leaders reached a deal that will add approximately $484 billion to the $2 trillion plus CARES Coronavirus response legislation passed at the end of March 2020.  The initial $322 billion for small business loans and Payroll Protection Plan (PPP) loans in the CARES Act ran out of funding within 2 weeks. Today’s agreement includes $60 billion earmarked for small-business disaster loans and grants, $75 billion in emergency funding for hospitals, $25 billion for testing, and more than $320 billion in additional funding for the PPP.

The legislation will include a requirement that $60 billion of the money for the small business loans be set aside for smaller lenders. In the last two weeks we learned that it’s extremely important to be working with the right banks and the right relationships.  The difference between who was approved for PPP loans and who was denied oftentimes came down to the banking institution itself, rather than need.  Small businesses that filed with community banks seemed to have more success. Do not wait until the legislation is passed to get your documentation together for a PPP application, rather establish the bank relationship now so you can move quickly. Please don’t hesitate to reach out if I can assist you by connecting you with a community bank that is open to new clients for PPP loans.

Keep in mind that for now, this is just an agreement and legislation has not been passed. The Senate is expected to pass the expanded funding legislation by unanimous consent today. House leaders are planning a vote on Thursday. President Trump has tweeted that he plans to sign in to action what Congress approves.

While this relief is welcome news to many small businesses, the issue of funding governments and municipalities will not be addressed in this new agreement. Lawmakers have already begun issuing proposals and demands for the next round of funding even though this round has yet to be signed.

As you face the day to day questions of balancing business concerns, the law, and health and safety, the firm is here to assist in any way we can.