President Donald Trump signed a legislation that will replenish funding for the federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). The package provides a $310 billion cash infusion for the PPP, $50 billion for EIDLs, $10 billion for EIDL grants, $25 billion for coronavirus testing, and $75 billion for hospitals. The bill quickly moved through the Senate and House of Representatives last week.
The PPP originally was allocated $349 billion as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), but the funds were depleted in only two weeks after the program went live on April 3. According to a PPP report from the Small Business Administration, by April 13, more than 1 million loans were approved, totaling $247.5 billion. The construction industry led all other subsectors with nearly $40 billion in loan approvals across more than 114,000 applications.
The National Association of Home Builders (NAHB) applauded the additional allocation in small business funding as a "welcome development" for the thousands of firms that "desperately need this important government program."
The Associated General Contractors of America (AGC) said the $310 billion in funding for the PPP will help thousands of firms retain construction jobs amid "rapidly declining demand for construction services."
"As one of the relatively few sectors of the economy still operating, construction firms still have significant payrolls in need of protection," AGC CEO Stephen Sandherr said in a prepared statement. "But with more than 50% of construction firms reporting project cancellations or delays, construction employers are struggling to retain workers. This new proposed legislation will help protect thousands of construction jobs, providing relief for our already hurting economy."
Under the PPP, small businesses—companies with 500 employees or fewer—can apply for partially forgivable loans that can cover operating expenses. Borrowers can apply for loans up to 2.5 times the company's monthly payroll costs for the period between February 15, 2020, and June 30, 2020, or $10 million, whichever is smaller. The portion of a PPP loan used to cover the first eight weeks of payroll, interest on mortgages, rent, and utilities can be forgiven. Forgiveness is also contingent upon employers maintaining or quickly rehiring employees and maintaining salary levels.
Businesses can receive a $10,000 cash advance within three days of applying for an EIDL of up to $2 million. The advance under the program does not need to be repaid and may be used to keep employees on payroll, pay sick leave, meet increased production costs, or pay business obligations.
