President Signs Bill for Additional Stimulus Funds for Small Businesses
H.R. 266 will fund an additional $484 billion for small businesses, hospitals and coronavirus testing. This second round of stimulus funding is now approved, after the continuing economic fallout from the COVID-19 pandemic resulted in the almost immediate depletion of available funds for small businesses from the CARES Act stimulus bill. Congress and the Trump Administration have since worked to authorize additional funds due to overwhelming demand from small businesses.
To aid small businesses, this supplemental appropriation will:
- Add $310 billion in additional funding for the Paycheck Protection Program (PPP), with some money set aside to support loans issued through smaller lenders ($60 billion).
- Of the $60 billion set aside for smaller lenders, $30 billion is allocated for banks and credit unions with consolidated assets between $10 and $50 billion. And, $30 billion is allocated for banks and credit unions with less than $10 billion in consolidated assets.
- Increase funding for Economic Injury Disaster Loan (EIDL) grants from $10 billion to $20 billion.
- Add $310 billion in additional funding for the Paycheck Protection Program (PPP), with some money set aside to support loans issued through smaller lenders ($60 billion).
Treasury Secretary Mnuchin addressed concerns about PPP loans being made to huge national chains like Shake Shack, which has already pledged to return its $10 million loan, while thousands of truly small businesses were left without any funding. The loophole in the CARES Act that companies like Shake Shack used is the language in the bill that only companies with 500 or fewer employees “per physical location” were eligible.
This allowed huge national chains to step up and request the maximum loan amount through their corporate headquarters. The Treasury Department issued guidance on April 23, 2020 to clarify the certification process and requirements for companies seeking loans designated for small businesses. President Trump has publicly requested that companies like Shake Shack return loan money received if they used this loophole to receive funds.
“They shouldn’t have taken it,” Trump said during the April 21st press briefing. “And they’re going to pay back that money.”
For additional industry-specific resources related to the COVID-19 pandemic, visit our COVID-19 Resource Center.
