New Guidance Slows Firehose of Funds from the PPP

When the government announced the first tranche of funding for the Paycheck Protection Program (PPP) there was a flood of applications which ultimately broke the Small Business Administration’s E-Tran loan system; after the initially bumps in the road were smoothed there was additional funding added to ensure all small businesses who need capital would get it; the second tranche did not go as fast, and there are still funds left in the program; many believe this is due to the guidance from Treasury saying all PPP loans would be audited, with a special interest shown to loans of more than $2mn; Treasury is trying to make a distinction between those who needed the money and those who did not really need it; the first round of funding saw dozens of public companies receive funds when small companies with a handle of employees were shut out; the new guidance was trying to ensure smaller firms were the focus on the funds, instead it has set off confusion amongst all sorts of companies who are unsure if they should apply and take the money if approved; there was also lawsuit filed in California by a software company aiming to get more clarity around the guidance; did a survey one week before the new guidance and found 33 percent of SMBs were unsure about the PPP process or if they would be obligated to repay to loan. Pymnts

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