The second round of funding for the overwhelmingly popular Paycheck Protection Program (PPP) has arrived. The funding comes as part of a $484 billion “interim” stimulus bill. The interim legislation allocated an additional $310 billion for PPP loans.
The new bill includes measures to ensure PPP loans have a better shot at reaching the businesses that need them most, setting aside funds for businesses owned by women and minority groups. These measures have been added to address issues that arose during the first round of PPP loans. Many smaller businesses were left out in the cold, unable to find a lender before funding was exhausted, while larger companies at big banks easily secured large sums under the program (some of which have already taken measures to return the funds they received through the program).
The PPP was created under the CARES Act with an initial budget of $350 billion. Before the bill had even passed, economists warned that the $350 billion wouldn’t be enough to provide loans to all the small businesses that needed assistance. That turned out to be the case. It wasn’t even close to enough money, and funds dried up within 2 weeks of the SBA opening applications. After the first round, only 1.6 million of the US 30.2 million small businesses had secured loans through the program.