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Congress Set to Pass Round 2 of PPP Funding

As of press time, the U.S. House of Representatives is expected to pass further COVID-19 relief legislation later today.
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As of press time, the U.S. House of Representatives is expected to pass further COVID-19 relief legislation later today. Dubbed “Phase 3.5,” the legislation passed the U.S. Senate earlier in the week and after House passage will head to President Trump’s desk where he has signaled he will sign it into law immediately.

This bipartisan agreement between the Trump Administration and congressional leaders would provide nearly half a trillion dollars in funding to fight COVID-19, keep businesses open and Americans employed. Specifically, Phase 3.5 contains significant funding for small businesses, primarily through an additional $310 billion for the Paycheck Protection Program (PPP) and an additional $60 billion for the Economic Injury Disaster Loan Program. The legislation made almost no changes to the program outside of increasing the total authorization levels for the PPP from $349 billion to $659 billion. The package would also provide $75 billion for hospitals and $25 billion for COVID-19 testing.

While the legislation basically contains a straight extension of PPP funding, it does contain a few additional restrictions. In response to reports of larger companies taking advantage of the program, Congress looked for ways to get more money to smaller businesses. With that in mind, they set aside $30 billion for loans made by Insured Depository Institutions and Credit Unions with assets between $10 billion and $50 billion and an additional $30 billion for loans made by Community Financial Institutions, Small Insured Depository Institutions, and Credit Unions with assets less than $10 billion.

Also today, the Small Business Administration (SBA) released additional guidance on the PPP through an update of their FAQ document to restrict larger companies accessing the program. The document now includes answers to 31 questions and the latest update includes some guidance on the certification process for businesses owned by larger companies. The Big “I” will continue to provide updates on the program through Markets Pulse and News & Views articles. We have also posted this guidance from the SBA on our Government Affairs website and will continue to post any additional guidance.

Wyatt Stewart is Big “I” senior director of federal government affairs.