Small businesses get a second chance at relief loans
If you didn’t secure a piece of the billions of dollars in pandemic-related relief money slated to go to US small businesses, you’ll get another chance in the coming weeks.
The US Senate on Tuesday approved a $484 billion package designed to refill the depleted coffers of two small business relief programs, the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. The PPP was established under the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act that Congress passed in late March.
Implemented by the US Small Business Administration (SBA), the PPP is designed to help small businesses with fewer than 500 employees cover up to $10 million in payroll and other expenses during the pandemic. But the program quickly ran out of money after being inundated with applications from desperate entrepreneurs across the country.
On Thursday, the House overwhelmingly passed the $484 billion spending package in a historic vote, with many lawmakers wearing masks and speaking through face coverings on the House floor.
The new bill includes $310 billion to replenish the PPP and $60 billion for a separate small business emergency loan and grant program, paving the way for veterinary practices in rural and small-town areas to have a better chance at a loan. Another $75 billion will be allocated for hospitals and healthcare providers, and $25 billion for a new coronavirus-testing program. The first round of funding for the PPP, totaling $349 billion, was depleted within two weeks as small business owners scrambled to get the loans in order to survive the economic slowdown caused by the pandemic. The SBA said in a press release that it processed about 1.6 million loans—what it says are 14 years’ worth of loans—in just two weeks.
That could mean that the new round of funding might dry up within a matter of days.
The additional $60 billion in the new bill will help fund the SBA’s EIDL program, which also ran out of money. This loan can provide up to $2 million to qualifying small businesses, including a forgivable loan advance of up to $10,000, according to the SBA.
How much have veterinary practices received so far?
As of April 16, 2020, the SBA had approved more than $43 billion in loans for “professional, scientific, and technical services,” which, under SBA’s classification system, includes veterinary services.
Veterinary services (including animal hospitals, veterinary clinics, veterinarians’ offices, and veterinary testing laboratories) account for about 2% of businesses in that category. While there is no hard data on veterinary practices that applied for PPP loans, based on the 2% figure, one could extrapolate that veterinary services received about $860 million in loans.
How to get a loan this time around
For the PPP, veterinary practices wanting to take advantage of the new funding will have to wait until the funds are officially released and then will need to apply through their individual SBA lenders. If you haven’t already, you will need to fill out a PPP borrower application form and pull together the information described in the form. Not all banks can offer the loans, so check with your local lender to make sure they are participating in the PPP before trying to apply.
The SBA says the PPP loans are awarded on a first-come, first-served basis. Only 1.66 million loans have been approved, with more than 30 million small businesses nationwide. With no data on how many applications are pending, it is impossible to say how many new applications will even be accepted once the funding goes through.
If you want to apply for the EIDL program, you can apply directly through the SBA website. It should be noted that as of this writing, the SBA website says it will not accept any new applications due to a “lapse in appropriations” for the EIDL. However, the new funds are expected to become available soon after the bill hits the president’s desk, so check the SBA website for updates.
Congressional leaders have suggested that another massive stimulus bill is yet to be introduced and could provide even more small business relief as well as the potential for another round of direct payments to individuals and families.
So, even if you can’t get a PPP or EIDL loan this time around, don’t give up. There may well be another chance for veterinary practices to receive assistance in the weeks to come.
Photo credit: © iStock/nuttiwut rodbangpong