On April 16, 2020, the Small Business Administration (SBA) announced that all funds allocated to the Paycheck Protection Program (PPP) have been exhausted. Due to the lack of available funding, the SBA is no longer accepting new PPP loan applications or enrolling new PPP lenders at this time. The Coronavirus Aid, Relief and Economic Security Act (CARES Act) originally authorized $349 billion in funds for the SBA to administer under the PPP.
The American Bankers Association reports that, “Loan applications received by banks but not yet submitted to SBA will not be able to be completed, and the agency will not maintain a queue for PPP applications once additional funds are authorized.” Based on current available information, any loan application that received an SBA authorization number will receive an SBA guaranty if funded by the applicant’s bank.
Lawmakers are negotiating an agreement that could provide additional funding to the PPP. Last week, Treasury Secretary Steven Mnuchin asked Congress to agree to an additional $250 billion in funds for the PPP. The proposal failed in the Senate. An agreement on additional funding has not been reached, and the Senate has adjourned for the week. Approval of additional funds will be postponed until sometime during the week of April 20, 2020, at the earliest.
For more information on the programs available under the CARES Act, contact Ford Turrell, Rob Davies, Matthew Crowe or Timothy Hillegonds.