On Tuesday, April 21, the Senate passed a measure that will add about $484 billion in new funding for the Paycheck Protection Program (PPP) and other small business aid introduced in the CARES Act for those impacted by the coronavirus. The House is expected to vote later this week.
The initial emergency relief program had a $349 billion cap and ran out of funding just two weeks after banks began accepting applications. Last week, the National Association of REALTORS® (NAR) wrote a letter to Congress advocating for additional PPP funding, as well as increased funds for the Economic Injury Disaster Loan Emergency Advance (EIDL) program.
“The PPP ran out of money in about two weeks and the EIDL was running on fumes,” said Shannon McGahn, NAR’s top federal advocate, in a statement. “These are two of the most extensive rescue programs in our nation’s history. We are hearing from brokers around the country who were able to keep their employees on the payroll because of this help and from self-employed members who have been able to keep their businesses afloat.”
“Although the rollout was a bit rocky because of the programs’ sheer size and demand, more and more banks are coming in line,” McGahn added, “and we encourage all our members who qualify to check with their lender again and keep trying. It’s worth it.”
PPP is available for struggling small businesses with fewer than 500 employees, making some brokerages and home-building firms ideal candidates. The funds can go toward payroll costs, mortgage payments, and rent and insurance—and the loan is completely forgiven, tax-free, if the borrower doesn’t fire employees or cut payroll in an eight-week period, starting when the loan is taken out.
Dean Mon, chairman of the National Association of Home Builders (NAHB), issued the below statement following the Senate’s announcement:
“The additional $380 billion in new small-business funding approved by the Senate is a welcome development for the thousands of home-building firms that desperately need this important government program. Many of these companies are stuck in limbo waiting for this additional funding. As Congress develops the next economic package, it needs to take additional steps to ensure broader builder eligibility under the Paycheck Protection Program (PPP).”
“Home building remains an essential business throughout most of the nation and ensuring land developers, multi-family property owners and the trade associations that serve the industry have access to this program must be a priority,” added Mon. “Providing sufficient access to the PPP will allow builders to keep their doors open, keep their employees on the job and continue to provide housing opportunities for all Americans during this challenging time.”
NAR also released the following guidance for REALTORS® on the PPP and EIDL:
If you’ve already applied for an EIDL:Â The SBA is processing applications already in their system on a first-come, first-served basis. You do not need to reapply.
If you have not already applied for an EIDL:Â Check back at the SBA application page once the additional funding is signed into law. The SBA will re-open applications shortly afterwards.
If you’ve already applied for a PPP loan through an SBA lender but have not been approved yet:Â Check with your lender to see if they are maintaining a queue of applications during the lapse or if you will need to reapply when the renewed funding comes through.
If you have not applied yet for a PPP loan through an SBA lender: Have the application form filled out and your documentation ready to provide to your lender. (For businesses with employees, have payroll documentation; for independent contractors, have your 2019 Form 1040, Schedule C, and 1099-MISC.) If you have an existing relationship with an SBA lender, you should go to that lender first once the program reopens, but be prepared to try multiple lenders, which you can find on the SBA site.
As the coronavirus and its impact on the industry unfold, RISMedia is providing resources and updates. Get the latest.
Liz Dominguez is RISMedia’s senior editor. Email her your real estate news ideas at ldominguez@rismedia.com.
