Is Additional Funding for PPP Loans on the Way?

Since the Coronavirus Aid, Response, and Economic Security Act (“CARES Act”) became law on March 27, 2020, small employers have had many questions about the forgivable loans made available under the Paycheck Protection Program (“PPP”).  As we noted in a prior post, PPP loans allowed most employers with fewer than 500 employees to borrow up to 2.5 times their average monthly “payroll costs” in order to avoid pay cuts and layoffs in the eight weeks after origination.  Needless to say, this program has been popular with small employers.  So popular, in fact, that the nearly $350 billion in initial funding ran out in less than two weeks.

Earlier this week, the U.S. Senate passed the Paycheck Protection Program and Health Care Enhancement Act, which would provide an additional $310 billion in funding for the PPP.  The bill also provides another $50 billion in funding for the Emergency Disaster Relief Loan (“EIDL”) Program, which provides low-interest loans to businesses affected by disasters.  The bill is expected to pass the U.S. House of Representatives on Thursday, April 23, and be signed into law by the president soon thereafter.  It remains to be seen, however, how long this round of funding for PPP loans will last.

For questions about this or any other labor and employment law topic, please do not hesitate to contact the attorneys at Hoffman & Hlavac.  Please be sure to subscribe to our blog and follow us on social media to stay on top of the latest developments that affect your workplace.