The U.S. Small Business Administration announced on April 15 that the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) were suspending new applications until further notice.
After an onslaught of applications, the amount of funding allocated to each program has been exhausted and, by law, the SBA will not be able to issue new loan approvals without additional funding.
“The SBA has processed more than 14 years’ worth of loans in less than 14 days,” according to U.S. Treasury Secretary Steven T. Mnuchin and U.S. Small Business Administration Administrator Jovita Carranza.
The EIDL, administered by the SBA’s ongoing Disaster Loans Program, was granted funds for COVID-19 related losses via the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 passed on March 4, 2020 (H.R.6074)
The PPP was created and funded via the Coronavirus Aid, Relief, and Economic Security Act or CARES Act (S.3548) and administered via private banks. It allocated $349 billion in loans to help small businesses cover employee payroll costs through June 1. As of April 16th, California small businesses have been approved to receive over $33 billion dollars through the PPP.
The SBA is asking Congress to allocate additional funds to the Paycheck Protection Program, which the SBA officials call ”a critical and overwhelmingly bipartisan program”, but it is not yet clear when those funds would become available, or how much additional funding would be allocated.
To receive updates on when applications for these programs re-open, sign up for the LA SBDC mailing list. In the meantime, we recommend you prepare the documents you will need to apply. If you need help preparing those documents, please call 1-866-588-SBDC – we’ll match you with a business advisor who can assist.