Jeff Flock of FOX Business talks about relief limits for small businesses and how companies are adapting in the midst of the pandemic.
The Paycheck Protection Program, a vital lifeline that helped keep small businesses afloat during the coronavirus pandemic, will reopen to candidates on Monday, the Trump administration announced on Friday.
The bailout fund – which provides forgivable loans to companies if they keep their payroll – will initially be available only to the first borrowers, with second-time applicants eligible to apply on Wednesday, according to the new guidance the Small Business Administration and the Treasury Department.
KEY DEMOCRATS SEE THE $ 900 billion COVID RELIEF PACKAGE JUST BEGINNING
The federal government will also give priority to companies belonging to minorities in the first two days of the program, accepting only loan applications from certain creditors that focus on needy communities.
Congress established the $ 670 billion rescue fund earlier this year with the approval of the CARES Act in late March. Lawmakers authorized another $ 284 billion last month to provide a second round of forgiving loans to small businesses as part of their more comprehensive $ 900 billion COVID relief plan. At least $ 40 billion has been set aside for companies with 10 or fewer employees and for loans under $ 250,000 in low-income areas.
Only companies with 300 employees or less are eligible to receive a second loan, which will be limited to $ 2 million. Borrowers also need to prove that they saw a 25% reduction in gross revenues during a quarter in 2020 compared to the same quarter in 2019.
WHAT’S IN THE NEW $ 900B CORONAVIRUS RELIEF BUSINESS?
During the first round, companies with fewer than 500 employees could receive up to $ 10 million.
At the beginning of the program, he was severely criticized for providing aid to publicly traded companies that had other avenues of relief – even when small businesses languished. The SBA and the Treasury Department, which jointly administered the program, struggled to close the loopholes that allowed multimillion-dollar companies to use the fund, including the promise to audit any loan worth more than $ 2 million.
DISCOVER FOX BUSINESS ON THE MOVE BY CLICKING HERE
Over approximately four months, the PPP distributed about $ 525 billion in forgivable loans to 5.2 million companies, saving about 50 million jobs, according to the SBA. The program closed for new applicants in late July, with about $ 38 billion remaining in the fund.