Paycheck Protection Program, Round 2: Can Your Business Receive Any of This Money?

PPP Paycheck Protection Program on Keyboard Key.

On Friday, April 24, President Trump signed into law a new bill providing a much needed additional $310 billion into the Paycheck Protection Program (PPP), created under the CARES Act (Coronavirus Aid, Relief and Economic Security Act) to help small businesses keep employees on the payroll, and Economic Injury Disaster Loans (EIDL).

Out of the $310 billion, $60 billion is to replenish the EIDL program and $250 billion for the PPP loans, with $60 billion set aside for community banks and community development financial institutions (CDFIs). The initial round of funding under the CARES Act of $349 billion lasted about a week before it dried up and this round is projected to only last four to six days.

Can your business apply for and receive any of this money?

The reality is most American businesses will not receive any of these relief funds. In the first round, 1.6 million businesses received approval with most still awaiting the funds. The process remains the same for PPP and you can access frequently asked questions in Newly Available CARES Act Loans: 10 Things Small Businesses Need to Know.

Here are the top three things you need to look at to determine if you will receive funds and increase your odds of success:

  1. If you received an SBA certification number in Round 1, you will receive funds. Your bank is going through the underwriting process and you should receive funds within 10 to 14 working days.
  2. If you didn’t receive an SBA certification number, but your application was accepted by your bank, you remain in the queue to receive funds. The program remains on a first-come, first-served basis. You should reach out to your bank and see if they can push your certification through the SBA.
  3. If you didn’t apply in Round 1, you should apply as soon as possible for both the PPP and EIDL loans. Unfortunately, many banks are not taking new applications because they already have so many in the pipeline. You can research participating lenders on the SBA website, or try fintech companies like PayPal, Intuit, Square, and OnDeck.
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Smaller community banks seem to have better luck with faster processing than the large national banks so you may want to start there. You can still apply for the EIDL loans at once the application is back up and running as it was shut down due to overwhelming demand.

What is different in this new relief bill?

The most significant change in this new round came in updated Treasury guidelines, requiring borrowers to certify in “good faith” that they have no access to additional sources of capital and that, as the law provides, “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

This clarification, while still somewhat blurry to truly define, was due to the public backlash caused by large chains and publicly traded companies like Shake Shack, Ruth’s Chris Steak House, and Sweetgreen obtaining major funding in PPP Round 1. These companies and others have pledged to return these funds.

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