PPP Update and EIDL Funding Update 04272020
Phase 3.5 Legislation Enacted, New Tranche of $310B Provided for PPP. On April 24, President Trump signed a $483B package which is generally referred to as the Phase 3.5 coronavirus package. The bill includes $310B in additional funding for the Paycheck Protection Program (PPP), $60B in funding EIDL small business grant/loan programs, $75B for hospitals, and $25B for testing efforts. Notably, of the $310B PPP funding, $30B is for mid-sized depositories (i.e., $10B to $50B in assets) and $30B is for community financial institutions and smaller depositories (i.e., <$10B in assets).
Effectively, the statute creates three separate funding pools and it is unclear at this stage how the SBA will police those volumes. The initial tranche of PPP funding was exhausted in roughly two weeks and it is expect this tranche to be disbursed in a relatively similar time period, which suggests that Congress will be forced to consider a third tranche of PPP funding as part of the forthcoming Phase 4 negotiations.
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