The Small Business Administration (SBA) announced last week that it ran out of funding for its Paycheck Protection Program. In response, Congress quickly amended the CARES Act to provide additional funds and expand several of the Act’s programs and President Trump signed the amendment into law today. 

.As we are all aware, the Small Business Administration (SBA) announced last week that it had run out of funds for the Paycheck Protection Program (PPP). However, Congress enacted emergency legislation this week to provide additional funds for the CARES Act and further expand several of the Act’s programs. Specifically, Congress amended the CARES Act’s Emergency Economic Injury Disaster Loan (EIDL) Grants provisions by adding a sixth qualifying business – agriculture enterprises. The amendment expands the EIDL Grants to include small business concerns engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural-related industries, so long as the business has not more than 500 employees, and also increased the funds available for Emergency EIDL Grants from $10 billion to $20 billion. 

Furthermore, the PPP received an increase in funding from $349 billion to $659 billion. Businesses that anticipate needing a PPP loan should submit their applications to the SBA as soon as possible before the funds are exhausted, especially since hundreds of millions of dollars of the initial PPP emergency funding were claimed by large, publicly traded companies, according to new research published by Morgan Stanley.

In fact, the U.S. government has allocated at least $243.4 million of the total $349 billion to publicly traded companies, the firm said.

The PPP was designed to help the nation’s smallest, mom-and-pop shops keep employees on payroll and prevent mass layoffs across the country amid the coronavirus pandemic.

But the research shows that several of the companies that have received aid have market values well in excess of $100 million, including DMC Global ($405 million), Wave Life Sciences ($286 million) and Fiesta Restaurant Group ($189 million). Fiesta, which employs more than 10,000 people, according to its last reported annual number, received a PPP loan of $10 million, Morgan Stanley’s data showed.

At least 75 companies that have received the aid were publicly traded and received a combined $300 million in low-interest, taxpayer-backed loans, according to a separate report published by The Associated Press.

Statistics released by the Small Business Administration last week showed that 4,400 of the approved loans exceeded $5 million. The size of the typical loan nationally was $206,000, according to the SBA report released April 16. 

The SBA awarded PPP dollars as follows: the construction industry received 13.12%, professional, scientific and technical services received 12.65%, manufacturing received 11.96%, health care received 11.65% and accommodation and food services received 8.9%.

Given the daily changing legal landscape, we strongly encourage employers to reach out to Raimondo & Associates with questions regarding specific situations. We are closely monitoring these developments. Because of these frequent developments, and the need to adapt the general guidance below to specific circumstances, employers should consult counsel regarding specific circumstances