Updated: April 24, 2020
URGENT: SBA Paycheck Protection Program and Economic Injury Disaster Loans have received a second round of funding
The key facet of the CARES Act, the SBA’s Paycheck Protection Program has received a second round of Federal funding. On April 24, 2020 H.R. 266 became law. Small businesses who are interested in participating in the program and have not begun to coordinate with their local financial institution should do so immediately. To find a participating local lender you can utilize the SBA’s Lender Search Tool.
The City of West Memphis anticipates the next round of Paycheck Protection Program funding to be depleted in a matter of days.
How to apply for the SBA Paycheck Protection Program
Small businesses and entrepreneurs interested in applying for a loan through the SBA Paycheck Protection Program can do so by contacting their local financial institution. To locate a participating lender you can utilize the SBA’s new online tool.
Additional lending options such as non-disaster SBA loans, which may be subject to benefits under the CARES Act Small Business Debt Relief Programare also available. For additional lending options from the SBA, click here.
Small Business Administration issues new guidance on the Paycheck Protection Program as Congress approves $321B in additional funding
In wake of Congress passing the next round of economic stimulus, the SBA has issued additional guidance pertaining to the PPP. The guidance addresses the issue which has risen with companies who have adequate sources of liquidity utilizing the program. A key excerpt from the guidance has been included below:
"Question: Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?
Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification."
SBA latest guidance on the Paycheck Protection Program