economic injury disaster loans Archives | Michael Gray, CPA's Blog

Paycheck Protection Loan funding passes in Congress

April 24, 2020
mike

On Thursday, April 23, 2020, the U.S. House of Representatives passed the Paycheck Protection Program an Health Care Enhancement Act.

Now that both houses of Congress have passed the legislation, President Trump says he will sign it.

The legislation adds $310 billion to funding for Paycheck Protection Loans, $50 billion for Economic Injury Disaster Loans and $10 billion for Emergency Economic Disaster Grants.

Banks are saying it’s likely these funds will be used for loan applications that are already in the pipeline.

Congress will likely soon revisit whether additional funding should be provided.

Senate passes a proposal to extend funding for PPP loans and EIDL loans

April 22, 2020April 22, 2020
mike

On April 21, 2020, the U.S. Senate passed the Paycheck Protection Program and Health Care Enhancement Act. The legislation would increase the authorization level for the Paycheck Protection Program from $349 billion to $659 billion, and increase the appropriation level for the PPP from $349 billion to $670.355 billion.

$30 billion of the increase is earmarked for distribution by community-based lenders.

It also increased the authorization level for Emergency Economic Injury Disaster Grants from $10 billion to $20 billion (maximum $10,000 grant for a business) and adds $50 billion for Economic Injury Disaster Loans.

Certain agricultural enterprises with not more than 500 employees are made eligible for PPP loans.

The House of Representatives is scheduled to pass the legislation on Thursday, April 23, and President Trump says he will sign it.

These funds are expected to be committed as fast as the initial amounts.

Congress will likely be revisiting funding for these loans again.

Here is a URL to the Bill that passed in the Senate. https://www.trsa.org/wp-content/uploads/2020/04/Bill-Text.pdf

Funds For SBA Coronavirus Loans Are Exhausted

April 20, 2020April 21, 2020
mike

Here is an update just in case you are unaware of the status of SBA PPP loans and EIDL loans.

On April 16, 2020, the Small Business Administration announced that the entire amount designated by Congress for Paycheck Protection Program loans, $349 billion, has been exhausted. Republicans are seeking another $250 billion.

The Small Business Administration also announced that all of the funds allocated by Congress for Economic Injury Disaster Loans have been exhausted. Congress is also negotiating providing more funds for that program.

Companies who received a loan number from their banks for their loans should eventually get funding. Check with your bank.

More than 25% of the funding went to under 2% of the firms that got relief. These companies include at least 60 publicly traded companies with thousands of employees and hundreds of millions of dollars in annual sales.

Shake Shack, Inc., Ruth Hospitality Group Inc. (Ruth’s Chris Steak House), Potbelly Corp. and Fiesta Restaurant Group’s Texas Taco Cabana all borrowed $10 million. (Shake Shack, Inc. has announced it will return its $10 million PPC loan.)

The three biggest state economies – California, Texas and New York – accounted for 23% of the loans. Businesses in small, rural states received a bigger share.

The business sector receiving the most money was construction, with 13% of the total.

The SBA issued new guidelines last Friday (after the limit was already reached) requiring self-employed persons, partnerships and limited liability companies to file their income tax returns before applying for PPP loans. The reason filing the income tax returns is required is to document self-employment income treated as wages. The requirement will penalize companies that haven’t filed their income tax returns yet because of the extended July 15, 2020 due date for 2019 federal income tax returns.