US Senate Enacts Legislation to Extend the Paycheck Protection Program

After $349 billion in paycheck protection program (“PPP”) loans were exhausted in just 13 days, the U.S. Senate today enacted legislation to provide additional funding for the program, including at least $60 billion set aside for smaller banks and lenders. The legislation does not alter the general eligibility, affiliation, forgiveness, repayment and loan requirements; but merely provides additional funding.

Specifically, the legislation increases PPP funding by $310 billion, including $250 billion accessible to all eligible lenders and borrowers, $30 billion set aside for loans made by Insured Depository Institutions and Credit Unions with consolidated assets between $10-$50 billion, and an additional $30 billion set aside for loans made by Community Financial Institutions, Small Insured Depository Institutions and Credit Unions with consolidated assets under $10 billion.

The legislation also provides an additional $50 billion in funding for SBA Economic Injury Disaster Loans (“EIDL”). Unlike PPP loans, which are potentially forgivable, subject to 1% interest and capped at $10 million, EIDL loans are not forgivable, subject to 2.75%-3.75% interest and capped at $2 million.

The legislation also provides an additional $10 billion in funding for EIDL grants, which provides businesses with up to $10,000 in advances on their EIDL loans that do not have to be repaid, and extends EIDL loan and grant eligibility to farms and other agricultural enterprises.

The US House of Representatives is expected to approve the legislation on Thursday, and the President has publicly signaled his intent to sign it.

For additional information on the PPP loan program, please contact us or review our prior alerts found on this blog and on MayerBrown.com.

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