What’s in the $ 1.9 billion small business rescue plan

What’s in the $ 1.9 billion small business rescue plan

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It authorizes another $ 7.25 billion for the Paycheck Protection Program, which provides forgiving loans to small businesses and other organizations plagued by the pandemic. However, the loans will only be forgiven if at least 60% of the money is used to maintain wage expenses and the rest goes to mortgage interest, rent, utilities, personal protective equipment or certain other business expenses.

The additional money is intended to take the loans into account to include more non-profit organizations as previously eligible, as well as digital news services providing local news and public health education during the pandemic.

Despite the added money, however, the legislation does not extend the program, which will currently expire on March 31st.

This is a problem because there is already a backlog of applications still pending approval by the Small Business Administration. And according to current rules, any loan that has not yet been approved on March 31 will not be funded.

This means that banks have to decide how much longer they want to accept new applications, as it now takes 24 to 48 hours before a bank hears from the SBA whether a submitted loan application has been approved.

In cases where applications have not been approved, the SBA may request more information, or mark a business owner as not eligible. It can take days or weeks to clear up these problems.

Bank of America, for example, on Tuesday did not accept any more applications. “As the largest lender in the program since its inception, we have 30,000 applications in process, and we want to give us enough time by March 31 to complete the work and get each client’s application through the SBA process, “A bank spokesman said in an email to CNN Business.

Banking associations, the American Institute of CPAs and others are appealing to Congress to extend the program to March 31, or to at least allow the SBA to process loan approvals for applications submitted before March 31.

As of March 7, the SBA has made 7.6 million PPP loans totaling $ 678.4 billion, since Congress created the program last year, according to federal agency data.

More money for restaurants, local operators and businesses in minorities

Other provisions in the U.S. bailout plan that are intended to help small businesses include:

Money to help countries help their small business economies: Through the state credit initiative for small businesses, the legislation allocates $ 10 billion to state governments to utilize private capital and take out low-interest loans and other investments to restore their small business economies.
More money for understaffed businesses: The law allocated $ 15 billion to the program for allocating disasters to economic injuries, which should be given to small businesses in underserved areas, especially those owned by minorities.

Special lighting for restaurants: The U.S. rescue plan includes nearly $ 29 billion to create a grant program that provides direct relief to restaurants.

Amid delays, small businesses are desperately waiting for PPP loans
More money for closed venue operators: Another $ 15 billion will be added to the Shuttered Venue Operators Grants program created by the previous economic aid package. The awards are intended to help those who run museum, theater, concert and other local venues that have had to close due to Covid restrictions. The bill also allows such operators to apply for PPP loans in addition to these grants.

Additional funding for the small business administration: To help the SBA administer all the new programs that fall under its scope as a result of the pandemic, the bill appropriates another $ 1.325 billion to its budget.

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