Covid-19 Daily Communications 04/24/2020
COVID-19 Daily Communications04/24/20
Highlights:
The Senate and the House have passed the $320 billion second round of Paycheck Protection Program (PPP) stimulus relief dollars as of Thursday. A Presidential signature is expected as early as today which allow funds to flow back to both the PPP and EIDL small business loan programs. Thursday, which provides government-guaranteed loans to small businesses.
The new relief package guarantees that at least $30 billion of the new funds will be designated for community banks so that they don't have to compete with larger institutions. Because lenders now have a backlog of applications, this money is expected to go quickly, too.
Congress also allocated $60 billion for the Economic Injury Disaster Loan program. The SBA received loan requests worth more than $400 billion through the program, which had only $10 billion in funding initially.
Banks are sounding the alarm that the upcoming funding round for the federal Paycheck Protection Program (PPP) is likely already tapped. “The majority if not all of the funding Congress is considering right now is already exhausted,” Nick Simpson, a spokesman with the Consumer Bankers Association told the Associated Press (AP) on Thursday, April 23. Because there is a large backlog of applications from the first funding round, it’s likely that few if any new applicants will get the forgivable loans from the Small Business Administration (SBA). Bankers said there are hundreds of thousands of pending applications — and with a daily burn rate of $50 billion, the PPP would need about $1 trillion to satisfy the demand.
About a third of the new funding is being allocated for small banks, but even they are backed up with applications. Some have said they did a year’s worth of applications in one weekend.
JPMorgan Chase still had to fund $26 billion in loans from hundreds of thousands of first-round customers.
The program was criticized after it was revealed that big loans were extended to public companies and nationwide chains worth millions. Harvard, rated as the world’s wealthiest university with a $40 billion endowment fund, was approved for an $8 million loan but decided to turn it down. Hamburger chain Shake Shack said it is returning the $10 million it received through the program.
The SBA has issued new rules it says will make it unlikely that publicly traded companies will receive money from the next round of coronavirus rescue funding.
It is unlikely the additional funding makes it until the middle of next week.
State and Local:
Cities Offering Emergency Business Relief Programs
Covington: city website, checklist and application
Fort Thomas: city website, press release, application, promissory note
Newport: city website, guidelines, pre-application
Fort Mitchell: city website, article
Business helping Business: The U.S. Chamber has launched the Save Small Business Fund, a pillar of the Save Small Business Initiative. The program provides $5,000 supplemental grants to small employers in economically vulnerable communities.
NKY Chamber Daily: http://www.nkychamber.com/news/covid-19/
US Chamber of Commerce:https://www.uschamber.com/members/small-business