On Friday, President Donald Trump signed a new, $484 billion coronavirus relief package into law, which includes $310 billion in new funding for the Paycheck Protection Program, or PPP. Boston Globe columnist Shirley Leung joined Boston Public Radio on Friday to discuss what small businesses can expect from the latest funding.
Leung said it was likely that the funds would dry up quickly because of demand.
“Even though there’s another $310 billion for [the Paycheck Protection Program], when the government releases that amount of money next week, that’s going to be gone probably in less than 48 hours.” She noted that even before Congress had passed its initial relief package in March, "there was a sense that well over a trillion, maybe even a trillion and a half, is needed.”
Hours after their conversation, some banking industry groups confirmed Leung’s prediction, saying that all $310 billion is likely already spoken for. Leung said she expects Congress will need to pass another package as soon as next week.
Many, including Treasury Secretary Steve Mnuchin, have criticized larger companies for taking advantage of previous funding designed to aid the nation’s 30 million small businesses. Leung said this latest round of money includes certain guidelines to limit large businesses from taking advantage.
“Because there had been such a public uproar every day, the [Small Business Administration] did update its guidelines for the loan program,” she said. "And it didn’t ban public companies from participating in PPP, but it said now they have to prove they need the money. And in the language they said it is ‘unlikely’ that a public company with substantial market value and access to capital markets would qualify for a loan."
"It’s not a law,” she noted, but called the new guidelines "baby steps” in the right direction.