by Kim, Lahey & Killough Law FirmUpdate on PPP Loan: $150 Billion Still Untapped
SBA Data Shows $150 Billion In PPP Loans Still Untapped
Reuters (5/26, Saphir, Schneider) reports that while the SBA’s PPP loan program “remains active,” data from the SBA “shows net weekly PPP lending has actually been negative since mid-May, as fewer firms applied for loans, and some borrowers returned funds.” Reuters adds, “All told, the SBA says it had approved $512.2 billion in PPP loans as of May 21. That’s nearly $150 billion less than the $660 billion allocated to the program, which was designed to keep Americans on company payrolls and off unemployment assistance.” The article adds that business owners “are now worried that confusing and changing rules may keep them from converting the money to a grant, meaning they will need to pay it back. To ensure forgiveness, for instance, firms need to spend three-quarters of the funds on payroll. But for some firms that doesn’t leave enough to cover overhead. Others don’t have enough work to justify rehiring many of their pre-crisis staff.”
Hoyer Says House And Senate Close On PPP Loan Extension
Bloomberg (5/26, Wasson, House) reports, “House Majority Leader Steny Hoyer said the House and Senate should be able to quickly agree on changes to the Small Business Administration’s popular Paycheck Protection Program to give loan recipients more flexibility in using funds. The House is poised to pass a bill on Thursday that would extend the current eight-week period during which businesses must use funds to have loans forgiven to 24 weeks or Dec. 31, whichever comes sooner. It would let businesses repay loans over five years instead of two, and scrap a rule that no more than 25% of proceeds can be spent on expenses. The House also plans to take up a bill to increase transparency in the program.” The article adds the “timing matters because the first companies that received loans after the PPP program opened on April 3 will see the eight-week loan-forgiveness periods begin to expire at the end of this week and in early June.”
CQ Roll Call (5/27, McPherson) reports, “On Thursday, the House will turn its attention to legislation tweaking the terms of the Paycheck Protection Program that Congress created as part of a roughly $2 trillion coronavirus relief package in March.” The article adds, “A bipartisan bill from Reps. Dean Phillips, D-Minn., and Chip Roy, R-Texas, would change the current eight-week period businesses have to spend the money and qualify for loan forgiveness to 24 weeks. The Senate last week reached bipartisan agreement to change the loan forgiveness period to 16 weeks but did not pass its bill before recessing.” In addition, the House will vote Thursday on a bill requiring the SBA “to publish a list of businesses that have received more than $2 million in PPP or economic injury disaster loans and other information about the loan approvals. Committees start remote hearings”
The Hill (5/26, Carney, Brufke) reports, “In addition to changing the period of time for businesses to spend PPP loans, the House will also take up legislation requiring the Small Business Administration to publicly publish information on recipients of PPP and emergency disaster loans.”
Download Your PPP Loan Forgiveness Application
Last week the Small Business Administration released an updated PPP Loan Forgiveness Application.
To apply for forgiveness of your Paycheck Protection Program (PPP) loan, you must complete the application as directed, and submit it to your Lender (or the Lender that is servicing your loan). Borrowers may also complete the application electronically through their Lender.
Need help? Read our article about “Making Sense of SBA Emergency Assistance Loans,” or reach out to Attorney Jason Rosen for more information: jrosen@kimandlahey.com.