Some American small businesses will be able to seek a second government-backed loan to help them get through the coronavirus pandemic.
The $900 billion stimulus bill that’s headed to President Trump’s desk includes about $284 billion in additional funding for the Paycheck Protection Program, which offered small employers forgivable loans meant to keep their staff on the payroll.
The Small Business Administration has already distributed 5.2 million PPP loans worth more than $525 billion. Businesses that are still struggling may be able to get another round of help — but they’ll have to meet stricter criteria than in the spring.
For one, only companies with 300 or fewer employees will be eligible for second loans, down from a limit of 500 in the program’s first iteration, according to text of the stimulus legislation Congress passed Monday.
Additional loans will be capped at $2 million instead of the previous limit of $10 million. And applicants seeking a second loan will have to show that their sales in at least one quarter of this year dropped by 25 percent or more from the prior year’s levels.
Additionally, the new law bars publicly traded companies from seeking PPP funds, a provision that was added after outrage about hundreds of such firms snagging millions of dollars in loans. Some big names such as Shake Shack and Lindblad Expeditions have returned the money.
The bill also simplifies the process for forgiving loans of less than $150,000. Those small borrowers will just have to sign a one-page form attesting that the money was used for its intended purpose.
That’s a win for banks, who had expressed concerns that the initial forgiveness process was too burdensome for small companies receiving little loans.
The stimulus package also gives the SBA $50 million to conduct audits and take up other efforts to tackle fraud in the massive program, according to The New York Times. The agency and the Treasury Department have already pledged to audit all loans larger than $2 million, but that will encompass less than 1 percent of the loans and only about 20 percent of all the money that’s been given out.
With Post Wires