Paycheck Protection Program Increase

Today's addendum to the CARES Act includes the following:

Section 101 provides amendments to the Paycheck Protection Program and to the Economic Injury Disaster Loans, and Emergency Grants.

The agreement increases the authorization level for the Paycheck Protection Program from $349 billion to $659 billion, and increases the authorization level for the Emergency Economic Injury Disaster (EIDL) Grants from $10 billion to $20 billion.

See our video on the EIDL Program: https://youtu.be/SzwQp11n-YQ (As we said in the video, you will want to document your EIDL and PPP applications. We still feel this program will have a hard time reaching women, Black, Hispanic and Asian small businesses. It has also been shown to provide more loans to red states than blue.)

The law also creates a set-aside for Insured Depository Institutions, Credit Unions, and Community Financial Institutions for the Paycheck Protection Program. It defines Community Financial Institutions as minority depository institutions, certified development companies, microloan intermediaries, and State or Federal Credit Unions. (Certified Development Companies (CDCs) are nonprofit corporations certified and regulated by the SBA, that work with participating lenders to provide financing to small businesses. There are 270 CDCs nationwide.) This section sets aside the following amounts for the Paycheck Protection Program to be made by the following institutions:

$30 billion for loans made by Insured Depository Institutions and Credit Unions that have assets between $10 billion and $50 billion; and

$30 billion for loans made by Community Financial Institutions, Small Insured Depository Institutions, and Credit Unions with assets less than $10 billion.

Small businesses should apply for both the EIDL and PPP Programs if they have not done so already. You should also immediately reach out to Insured Depository Institutions and Credit Unions that have assets between $10 billion and $50 billion. Of course, you will want to reach out to Community Financial Institutions, Small Insured Depository Institutions, and Credit Unions with assets less than $10 billion.

For a list of all banks, see: https://www.minorityfinance.com/guide/banks.xlsx

For a list of all credit unions, see: https://www.minorityfinance.com/guide/creditunions.pdf

For a list of all Community Development Financial Institutions in the US., see: https://www.minorityfinance.com/guide/cdfi.pdf

(Data from 2015).

We offer business consultation specifically focused on the needs of businesses during the COVID crisis. See: https://clarity.fm/williamcunningham

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