Congress and the Trump Administration have reached a deal on a $484 billion interim COVID-19 funding bill that will, in part, replenish the small business Paycheck Protection Program (PPP). The “Phase 3.5” relief bill was passed by the Senate today, with the House vote set to take place on Thursday.
Included in the bill is $322 billion for the PPP, with $60 billion earmarked for small lenders and community banks. Also, $60 billion in additional funds will be provided for Economic Injury Disaster Loans (EIDL), along with a provision allowing previously excluded agricultural businesses to participate.
EIDL are low-interest loans (3.75%) up to $2 million for small businesses (up to 500 employees) to cover accounts payable, fixed debts, payroll, and other bills due to COVID-19. You may get both an EIDL and a PPP loan, as long as they don’t pay for the same expenses. These loans are issued by the Small Business Administration (SBA).
Demand for the last round of PPP and EIDL far exceeded supply, with funding quickly running out for these first-come, first-served loan programs. Prior to final passage and implementation of Phase 3.5 funding, we encourage you to make your preparations now. Work with your lender to access the PPP. For the EIDL, you can apply directly to the SBA once the application process opens back up.