President Donald Trump signed a legislation that will replenish funding for the federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). The package provides a $310 billion cash infusion for the PPP, $50 billion for EIDLs, $10 billion for EIDL grants, $25 billion for coronavirus testing, and $75 billion for hospitals. The bill quickly moved through the Senate and House of Representatives last week.
The PPP originally was allocated $349 billion as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), but the funds were depleted in only two weeks after the program went live on April 3. According to a PPP report from the Small Business Administration, by April 13, more than 1 million loans were approved, totaling $247.5 billion. The construction industry led all other subsectors with nearly $40 billion in loan approvals across more than 114,000 applications.
The National Lumber and Building Materials Dealers Association (NLBMDA) applauded the rapid approval of the additional funding for the PPP program
“NLBMDA is pleased to see the House act swiftly to pass additional loan funding and calls on President Trump to quickly sign this into law,” Jonathan Paine, NLBMDA president and CEO, said in a prepared statement. “LBM dealers are some of the most essential businesses in the United States and it is crucial that they have access to relief programs as the pandemic continues.”
Under the PPP, small businesses—companies with 500 employees or fewer—can apply for partially forgivable loans that can cover operating expenses. Borrowers can apply for loans up to 2.5 times the company's monthly payroll costs for the period between February 15, 2020, and June 30, 2020, or $10 million, whichever is smaller. The portion of a PPP loan used to cover the first eight weeks of payroll, interest on mortgages, rent, and utilities can be forgiven. Forgiveness is also contingent upon employers maintaining or quickly rehiring employees and maintaining salary levels.
Businesses can receive a $10,000 cash advance within three days of applying for an EIDL of up to $2 million. The advance under the program does not need to be repaid and may be used to keep employees on payroll, pay sick leave, meet increased production costs, or pay business obligations.
