Additional $310B Approved for SBA's PPP Loans
On March 27, the President signed into law H.R. 748, the Coronavirus Aid, Relief and Economic Security Act, better known as the CARES Act. Among other things, the CARES Act created the Paycheck Protection Program (PPP), an expansion of the Small Business Administration’s (SBA) 7(A) loan program. The purpose of the program is to get critical dollars into the hands of small businesses throughout the country via credit unions, banks and other financial institutions so these businesses can cover their payroll, rent/mortgage, healthcare and utilities expenses during the ongoing COVID-19 crisis.
Included in the bill was a $349 billion allocation for the SBA’s PPP loans. By April 16, this funding amount had been exhausted by small businesses needing emergency funds to support employees and cover critical business expenses during closure. On April 24, the President signed into law H.R. 266, the PPP and Health Care Enhancement Act, which allocates a renewal of $310 billion to the program.
“Before funding ran out, Michigan credit unions helped member owners close on $750 million worth of PPP loans for 7,500 businesses. These loans reached an estimated 150,000 employees,” said MCUL President/CEO Dave Adams. “These new funds will allow Michigan credit unions to do what they do best — serving those in need. Our movement will continue to proactively reach out to members in need of small business support to assist with the application process.”
See below for other credit union-specific provisions in the bill:
- Sets aside $30 billion of the overall $310 billion specifically for insured depository institutions and credit unions with assets between $10 billion and $50 billion (no MI credit unions meet this threshold).
- Sets aside an additional $30 billion of the overall $310 billion specifically for community financial institutions, insured depository institutions and credit unions with assets less than $10 billion (all MI credit unions would meet this threshold).
- Defines community financial institutions as- minority depository institutions, certified development companies, microloan intermediaries, and State or Federal Credit Unions
- Appropriates $10 billion in additional funding for Emergency Economic Injury Disaster (EIDL) grants.
- Appropriates $2.1 billion to the SBA so they can bring on additional staff to help manage the PPP program and to cover the agency’s expenses.
Also, the bill will provide an additional $75 billion in funding to hospitals and $25 billion related to increasing COVID-19 testing efforts.
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