From the HBPA Media Team:
I am reaching out to you today to provide this recent update from Washington and encourage you to forward this email as a reference. As most of you are aware on March 27, the CARES Act was signed into law, and $349 billion was appropriated to support small businesses (including racehorse training operations) across the country during the coronavirus pandemic. Certain Small Business Administration (SBA) programs in the CARES Act such as the Paycheck Payroll Program (PPP) were so popular that on April 16, after being open for only a week, the SBA had to stop accepting applications because the funds had been exhausted. There were over 1.6 million loans were approved across the country which has led to Congress and the Administration debating for additional funding to support this backlog of applications.
On Tuesday April 21, Senate Republicans and Democrats struck a $484 billion deal aimed at replenishing both SBA as well as healthcare-related funds. The Senate passed the agreement that contains additional relief funding which included $310 billion for the SBA’s Paycheck Protection Program (PPP). It is worth noting that $60 billion of those dedicated funds to small financial lenders and community-based financial institutions which is an important note to reference when you are considering your application. Also, please make note that it is estimated that the additional $310 billion for PPP could run out in only 72 hours, therefore if you have not yet applied, I strongly urge you to do so as soon as the bill is signed by the President – which is expected Thursday the 23rd.
IMPORTANT: Regarding those who have already applied for the PPP loan and not received assistance: We can make you aware that according to staff members from the office of Senator Rubio who is the Chairman of the Small Business Committee team, the criteria for re-applying or not re-applying for the PPP depends on your specific bank and their process. Senator Rubio’s team said it is not the intent for businesses who have already applied to have to reapply and the applications were to be processed on a first-come, first-served basis. With this information I urge stakeholders to act quickly and contact lenders if they want to be certain. As you know, many lenders have stopped accepting applications since relief funds have run dry, but applicants can still work to fill out the application and identify possibly a new financial institution that is taking applications, so that they are ready to go when the cash starts flowing again. Act now.
|Loan Size||Approved Loans||Approved Dollars||% of Count||% of Amount|
|$150K and Under||1,229,893||$58,321,791,761||74.03%||17.04%|
It is also worth noting, especially to 501(c)(6) organizations such as most HBPA affiliates not qualified for relief under the current PPP, that an additional $60 billion will be provided for Economic Injury Disaster Loans (EIDLs) where (c)(6) organizations do qualify for this loan program.
Additionally, the bill will be sent to the House today (Wednesday the 22nd), which will return on Thursday to pass it if all goes as expected as mentioned earlier. It is believed the House will also formally approve the task force to oversee COVID-19 funding implementation, which will be led by Majority Whip Clyburn (D-SC). And finally, the House may also address a rule change that would allow the chamber to permit remote committee work and, possibly, remote voting or remote voting through a proxy.
Finally, we can let you know various House committees are already working on “Phase 4” legislation. We strongly recommend that you communicate with your U.S. Representatives and Senators requesting that tax exempt organizations (business leagues such as HBPAs) under 501(c)(6) of the IRC be included in the PPP under this round of funding. Based current conversations, we expect the House goals for “Phase 4” to emphasize more state and local funding, additional unemployment assistance, food benefit/nutrition funding, and more. The House is currently scheduled to return on May 4, but it is still unclear if that date will change. Either way, “Phase 4” is not likely to move before mid- or late-May.
Below you will find a section by section summary of the new bill text:
Small Business Programs
- Section 101. Amendments to the Paycheck Protection Program, Economic Injury Disaster Loans, and Emergency Grants
- Increases the authorization level for the Paycheck Protection Program from $349 billion to $659 billion.
- Increases the appropriation level for the Paycheck Protection Program from $349 billion to $670.335 billion.
- Increases the authorization level for the Emergency Economic Injury Disaster (EIDL) Grants from $10 billion to $20 billion.
- Allows agricultural enterprises as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)) with not more than 500 employees to receive EIDL grants and loans.
- Creates a set-aside for Insured Depository Institutions, Credit Unions, and Community Financial Institutions for the Paycheck Protection Program.
- Defines Community Financial Institutions as minority depository institutions, certified development companies, microloan intermediaries, and State or Federal Credit Unions.
The following amounts for the Paycheck Protection Program to be made by the following institutions:
- $30 billion for loans made by Insured Depository Institutions and Credit Unions that have assets between $10 billion and $50 billion; and
- $30 billion for loans made by Community Financial Institutions, Small Insured Depository Institutions, and Credit Unions with assets less than $10 billion.
I hope this information is beneficial, and feel free to reach out to me or General Counsel Peter Ecabert if you have questions.