A Second Wave of Help is on the Way For Small Businesses

A Scramble in the Senate

Across the country last week, some small businesses impacted by coronavirus felt relief as they received funding from the Federal Government’s Paycheck Protection Program (PPP). Others felt frustration and worry since the funds from the $350 billion program ran dry before many applications could be processed.

Early Tuesday morning, lawmakers came to an agreement about how to provide further aid to struggling small businesses. Treasury Secretary Steven Mnuchin, White House Chief of Staff Mark Meadows, Senate Democratic Leader Chuck Schumer, and Speaker Nancy Pelosi discussed plans for providing a second wave of aid, and eventually struck a deal.

Though Monday’s negotiations were rocky, lawmakers on both sides of the aisle were optimistic about the outcome of Tuesday’s negotiations. Their predictions came true and in a 4 p.m. pro forma session yesterday afternoon, the Senate passed the bill.

Here’s What’s Included

The new package will encompass $484 billion in total funds. It will provide an additional $310 billion for the Paycheck Protection Program. $60 billion will be devoted to small lenders. $50 billion will go to the Economic Injury Disaster Loan Program. $25 billion will be put towards COVID-19 testing, and an additional $75 billion will go to hospitals.

Both Democrats and Republicans agreed on the need to provide more PPP funding, but disagreed about what else should be included in the initiative. At first, Republicans only wanted to fund small businesses. Democrats pushed to add more funds for food stamps, support for state and local governments, and hospital funding. In the end, money for hospitals and coronavirus testing was added onto the small business relief package, but other additions were left off.

Looking Ahead

Lawmakers are analyzing the successes and failures of the last wave of funding as they make plans going forward. Outcry about the program erupted when news broke that large hotel and restaurant chains had soaked up funding while some local businesses were left with nothing. The next wave of funding will go to many of those local businesses who did not receive money they applied for from the first relief package.

Some larger companies have also stepped in to rectify the situation. On Monday, the CEO of Shake Shack announced that the burger joint would return its $10 million in loans to make room for more fragile businesses without as much access to capital.

Banks also voiced anger over a lack of instruction about how to distribute money as applications for loans flooded their systems. Lawmakers hope that the distribution of this next wave of relief will be more smooth, and will help businesses keep their heads above water until the coronavirus storm passes.

The bill, which is supported by the White House, now makes its way to the House of Representatives where it could be voted upon as soon as tomorrow.

Running a business during a time of economic uncertainty is stressful and we want to help make it easy for business owners to compare their small-business financing options. We’ve added offers from a number of lenders, including payment protection loans, to Lantern —a marketplace for financial products that is owned and operated by SoFi.

---

SoFi receives compensation in the event you obtain a loan through the Lantern marketplace. The Lantern website is owned by SoFi Lending Corp. or an affiliate, a lender licensed by the CBO under the CFL, license number 6054612, NMLS #1121636 (nmlsconsumeraccess.org). Loans may not be available in all states, such as MS.

This article contains breaking news and events related to the current state of politics and the economy. While we try our best to keep our articles as up-to-date as possible, the ongoing effects of COVID-19 are happening in real time and information is subject to change.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Financial Protection and Innovation under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp. or an affiliate, NMLS # 1121636. (www.nmlsconsumeraccess.org)

SOSS42201