On Tuesday afternoon, the Senate approved a $484 billion bill aimed at providing added relief to businesses impacted by the COVID-19 pandemic. lt includes approximately $310 billion in additional funding for the Paycheck Protection Program (PPP), after the initial $349 billion in funds was quickly depleted. Of the $310 billion, $60 billion is reserved for smaller lenders, including community financial institutions, small insured depository institutions, and credit unions with assets less than $10 billion.
The bill also includes an additional $60 billion for the Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) program ($10 billion for emergency grants and $50 billion for loans), which had also previously reached capacity.
Most of the remaining funds are earmarked for hospitals ($75 billion) and an expansion of virus testing and contact tracing nationwide ($25 billion).
The House is expected to vote on the bill on Thursday, and the President has indicated that he will sign it shortly afterwards.
Many businesses in the tri-state area were able to secure loans under the initial round of PPP funding. More than 69,000 Pennsylvania businesses received nearly $15.7 billion in approved loans, according to SBA data released last Friday. More than 33,000 New Jersey businesses were approved for $9.5 billion in loans, and approximately 5,100 Delaware businesses were approved for $1.09 billion in loans. However, many more businesses in our region are still in need of support, so this new round of funding represents a critical lifeline.
Earlier proposals referred to this new relief package as Stimulus 3.5, in reference to the three bills that came before it: the $8.3 billion bill to fund vaccine development efforts, the Families First Coronavirus Response Act, and the $2 trillion CARES Act. Congress is now expected to turn its attention to a fourth wave of proposed stimulus to address other funding needs, such as measures to contain health care costs related to the virus and its treatment.
PA Working Capital Access Program Potentially Reopening
In other business relief news, last Friday Pennsylvania governor Tom Wolf proposed additional financial support for small businesses as part of his post-pandemic plan. The assistance would include reopening the state’s Working Capital Access Program, which was quickly depleted after its initial introduction. The governor’s proposal also includes the creation of a grant program for companies under 30 employees or $3 million in annual sales, and tax credits for the manufacturing industry. State officials have not yet released a timeline for implementation of the proposed plan.
As more details of these additional funding efforts are made available, we will provide additional updates. We also continue to update our COVID-19 Resource Center, which you can access here. If you have any questions about these or any other matters, please contact your Kreischer Miller relationship professional or any member of our team.
Information contained in this alert should not be construed as the rendering of specific accounting, tax, or other advice. Material may become outdated and anyone using this should research and update to ensure accuracy. In no event will the publisher be liable for any damages, direct, indirect, or consequential, claimed to result from use of the material contained in this alert. Readers are encouraged to consult with their advisors before making any decisions.