In an effort to help small businesses remain afloat in a nearly comatose economy, the U.S. Senate passed another COVID-19 relief package on April 21.
The latest in a string of stimulus bills comes with a price tag of $484 billion. The majority of the bill will go toward relief for small businesses with the remaining funds allocated to hospitals and COVID-19 testing centers.
The bill was primarily created to replenish the Paycheck Protection Program (PPP) and to target smaller businesses which don’t have access to large financial institutions.
The PPP ran dry last week after more than 1.6 million businesses across the country applied for relief loans. The Small Business Administration (SBA), the agency responsible for granting the loans under the PPP, has already approved more than $342 billion in loans since the pandemic hit. The April 21 relief package will provide the SBA with another $321 billion so it can meet the needs of small businesses’ desperate for financial aid.
Another crucial component of the bill is its inclusion of smaller, underbanked businesses which don’t have access to the loans provided through the PPP. Banks have been prioritizing their existing customers and large restaurants when approving loans with funds from the PPP, leaving smaller businesses floundering.
The new bill will designate $60 billion for smaller lending facilities, including “community financial institutions, small insured depository institutions and credit unions with assets less than $10 billion.”
This is great news for credit unions which will now have access to the funds they need to help their members who own small-businesses.
The relief package also provides $75 billion for hospitals and health care providers and an additional $25 billion to fund and facilitate COVID-19 testing.
Your Turn: How will this relief package affect you? Let us know in the comments.