UPDATED: $484 Billion Stimulus Package Signed Into Law

On April 24th , President Donald J. Trump approved a new stimulus relief package that includes hundreds of billions of dollars in new funding for small businesses hurt by the coronavirus outbreak. The $484 billion package also includes monies for hospitals and expanded COVID-19 testing. This proposed bill comes after the passage of a $2 trillion rescue package that Congress approved last month. To specifically support small businesses, the stimulus authorizes an additional $320 billion to fund the Paycheck Protection Program (PPP), which was created as part of March’s unprecedented rescue package. The PPP consisted of offering forgivable loans to small businesses to pay their employees during the COVID-19 crisis. Due to a lapse in appropriations funding, as of April 17^th, the Small Business Administration (SBA) was unable to accept any new applications for the PPP. Many of the large banks who were accepting applications for the PPP carried stipulations that they would only work with businesses who were current members. In order to better serve potential applicants, $60 billion of the $320 billion earmarked for the PPP has been carved-out for community-based lenders, as well as mid-sized banks, which can better serve smaller businesses and minority-owned firms, organizations that are less likely to have an existing relationship with a larger bank. The $484 billion stimulus package also contains $60 billion for the SBA’s Economic Injury Disaster Loan Program, which offers emergency grants of up to $10,000 to businesses awaiting funding on a disaster loan. Like the PPP, this program also ran out of funding earlier this month. Now that this stimulus package has been signed into law by the President, funding should quickly begin again on both programs. Other SBA Funding Programs Due to the fact that initial funding for both the PPP and Economic Injury Disaster Loan Program ran out in a matter of days, small businesses should be aware that the SBA does offer other loan options that are not necessarily COVID-19 related. These programs include:

• 7(a) program - This program offers loans up to $5,000,000 as an all-inclusive loan for eligible businesses. The funds can be used for working capital, expansion/renovation, new construction, land purchase or building purchase, equipment purchase, fixtures, lease-hold improvements, debt refinancing for compelling reasons, seasonal lines of credit, inventory, or to start a business.
• Express loans - These can provide up to $350,000 for up to seven years with an option to revolve the loan. Turnaround time is about 36 hours to know if you are approved or denied.
• 504 loan - This loan is limited for the acquisition of refinancing of fixed assets. It is to help with job creation and retention.
• Microloans - Nonprofit lending organizations may offer microloans to underserved markets. These loans can be funded up to $50,000 and must be used for working capital, supplies, machinery, equipment, or fixtures but not real estate.
• Export loans - The SBA offers a number of export loans for small businesses. These include the Export Express loan, Export Working Capital program, and International Trade loan program.
• The 8(a) Business Development program was created for small businesses owned by economically or socially disadvantages entities or individuals.

The SBA has also announced the Small Business Debt Relief Program, where they will cover all loan payments on non-disaster SBA loans, including 7(a), 504, and microloans, consisting of principal, interest, and fees, for six months. This program would apply to businesses that qualify for and receive funding prior to September 27^th, 2020.