On Friday, April 24, 2020 President Donald Trump signed into law a $484 billion Paycheck Protection Program and Health Care Enhancement Act previously approved by the Senate. The bill provides an additional $310 billion for the Paycheck Protection Program (PPP), $60 billion for the Small Business Administration’s Economic Injury Disaster Loan program, $75 billion for hospitals, and an additional $25 billion for corona virus testing.
There was strong demand for the initial $350 billion in PPP funding, with applications quotas in many cases filled by lending banks overnight. The additional funding signed last Friday replenishes the popular small business lending program fund.
The SBA issued guidance last Thursday warning that larger companies may not qualify for PPP loans. The PPP funding is available to small businesses operational on Feb. 15 with 500 or fewer employees. However, businesses with more than 500 employees in certain industries can also apply for loans as per clarification provided by the SBA and Treasury Department in the PAYCHECK PROTECTION PROGRAM LOANS Frequently Asked Questions section:
Small business concerns can be eligible borrowers even if they have more than 500 employees, as long as they satisfy the existing statutory and regulatory definition of a “small business concern” under section 3 of the Small Business Act, 15 U.S.C. 632. A business can qualify if it meets the SBA employee-based or revenue- based size standard corresponding to its primary industry.
The SBA also explains a requirement for all borrowers to assess their economic need for a PPP loan under the standard established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136.
The latest update in a Q&A session published by the IRS answers many common questions of eligibility for the PPP loan and requirements for submitting loan applications