Congressional leaders are negotiating legislation to expand the Paycheck Protection Program (PPP) loan by $250 billion, with half of that amount being distributed through community banks.
The PPP loan was a key component of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which became law on March 27, 2020. The CARES Act provided $349 billion for initial funding to guarantee PPP loans for small businesses through the U.S. Small Business Administration (SBA) that equal up to 250% of a company’s monthly payroll (capped at $10 million), which can be used to cover payroll, mortgages, rent and other specified expenses. The PPP program began on April 3, but the initial amount funded by Congress is insufficient to address the large numbers of small businesses taking advantage of the program, hence lawmakers are moving to increase the funding level.
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