As of April 16, 2020, the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) had run out of money from their initial funding, which was $454 billion. These programs were designed to provide emergency relief to maintain business viability, as small businesses struggle due to the significant economic downturn associated with the coronavirus pandemic. To address this lack of funding, on April 24, 2020, President Trump signed a $484 billion coronavirus relief bill that provides additional financial aid for small businesses and hospitals. The bill provides $310 billion to enhance the PPP, $75 billion to aid hospitals, $25 billion to increase nationwide testing, and $60 billion for emergency disaster loans and grants.
A day earlier, on April 23, 2020, the SBA published new guidance for the PPP. In the wake of negative publicity surrounding the program, including loans made to large corporations and universities with sizeable cash reserves, the SBA strengthened the program’s certification requirements. Specifically, a borrower needs to certify that “current economic uncertainty makes this loan request necessary to support the ongoing operations.” Sen. Marco Rubio (R-FL), Chairman of the Senate Small Business Committee, indicated his Committee would conduct aggressive loan oversight, and noted his willingness to subpoena companies suspected of falsifying loan certifications.
On May 3, 2020, the Trump administration announced that 2.2 million small business loans totaling approximately $175 billion have been make from the second tranche of PPP funding. For this round of funding, the average size of the loan to date is $79,000. The demand for loans still remains strong, as evidenced by technical difficulties loan applicants faced when applying for the second round of loans when they first became available.