By Katharine Carlon
katharine@corridorbusiness.com
More relief for small business is on the way after the U.S. House of Representatives overwhelmingly approved a $484 billion coronavirus relief bill April 23, bringing total federal spending on the crisis to nearly $3 trillion.
President Donald Trump is set to sign the aid package into law at noon on April 24, making way for more than $310 billion in additional funding for the depleted Paycheck Protection Program (PPP), including $60 billion set aside for lending institutions serving minority or under-served areas.
The deal also includes an additional $60 billion for SBA Economic Injury Disaster Loans (EIDL), $75 billion to fund hospitals and health care providers, and $25 billion for state-led COVID-19 testing plans and for testing research and development at agencies such as the Centers for Disease Control and Prevention and the National Institutes of Health.
The initial $350 billion PPP, part of the $2.2 trillion CARES Act passed last month, ran out of funds last week after about 1.6 million loans were approved over a two-week period. The Small Business Administration is expected to begin processing new loans as early as April 27, according to Politico.
“It’s clear that small businesses are still struggling and in need of an immediate infusion of funding,” U.S. Rep. Dave Loebsack (D-Iowa) said in a release after passage of the government’s latest stimulus package. “I am especially pleased that $60 billion of the PPP will be set aside to specifically benefit underserved communities, including rural areas. Additionally, I will work with my colleagues to provide oversight of PPP to ensure these funds get to the small businesses who actually need the assistance.”
In response to criticism that a number of public companies like Shake Shack and Potbelly Sandwich shop had accessed PPP funding, the SBA issued new guidance on April 23 that makes it “unlikely” large, public companies can tap into the next round of funding.
The bill’s passage was hailed by business groups, including the U.S. Chamber of Commerce.
“Every hour of every day, small businesses across the country are being forced to make difficult decisions due to the significant revenue disruptions caused by the coronavirus,” said Neil Bradley, executive vice president and chief policy officer for the organization, in a statement. “These additional funds could make the difference between keeping a business up and running over the coming weeks or being forced to reduce salaries, lay off employees, or shutter businesses entirely.”
According to an analysis by business.org, just under 11% of Iowa’s small businesses were able to receive PPP funding in the initial round of lending, with 29,424 small businesses receiving more than $4.3 billion in loans.
While that might sound inadequate, business.org ranked Iowa sixth in the nation in terms of businesses securing funds. Nationally, just 5.7% of U.S. small businesses were approved for funding.
The top 10 most financed states, including Iowa, all have fewer than 500,000 small businesses. Larger states like California, where only 2.8% of small businesses received financing, ranked near the bottom loan-wise. CBJ
