March 31, 2020
By Caity Witucki
Contributing Editor, SBA Hot Topic Tuesday
SBA Hot Topic Tuesday — White House Expects to Launch $2 Trillion Coronavirus Economic Aid Package This Week
On Friday, President Donald Trump signed into law a historic $2 trillion stimulus package to support the U.S. economy in its fight against the devastating spread of Covid-19. The package includes nearly $350 billion in appropriations for aiding small businesses grappling with economic disruption. The White House is now working with the Federal Reserve and the Small Business Administration to set up the program as quickly as possible, accelerate the approval process and start doling out money.
At a White House briefing prior to the bill’s signing, Treasury Secretary, Steven Mnuchin indicated that rules and regulations regarding the new Paycheck Protection Program loans would come out within a week. “I expect by the end of next week, we will have a very simple process where these [loans] can be made and dispersed in the same day,” Mnuchin told the nation. “So this will be a very simple system to get money into small business hands.”
On Sunday, Mnuchin reiterated that the program was on track to get the loan program running by Friday. “The Administration is focused on getting this money into the economy quickly,” Mnuchin said in an interview. “Small business loans will be available this week… Any FDIC bank, any credit union, any fintech lender will be authorized to make these loans to a small business subject to certain approvals.”
However, lenders still need a significant amount of guidance before they will be able to assist with the preparation of Paycheck Protection Program loans. Ami Kassar, CEO and founder of MultiFunding, says new systems will need to be built quickly, and clarification on application rules is likely to take at least a week, “Keep in mind that things are changing fast. There’s a lot of conflicting information out there… last Friday the SBA website offered some loan application documents for borrowers to submit to the Agency, but I didn’t have confidence that the documents were accurate,” Kasser said in an interview with Inc.
National Economic Council Director, Larry Kudlow has a similar opinion, reporting on Saturday that he expects that the money from the bill would be available to American small businesses in a “couple of weeks.” However, preliminary guidance from the SBA may come as early as March 31, 2020.