Since enactment of the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act on March 27, the Small Business Administration (SBA) on Thursday, April 16 depleted $350 billion of loan commitments under the Paycheck Protection Program (PPP), hitting the maximum amount authorized by the massive economic relief package.  Because Congress is officially out of session until Monday, May 4, lawmakers would have to pass legislation to authorize additional funds under rigid “pro forma” procedures prior to that date. Last week, the Senate passed in pro forma session a narrow bill adding $250 billion to the PPP. The House, however, rejected the proposal, and countered with a bill that would authorize $250 billion to fund municipal governments and hospital networks, in addition to Paycheck Protection aid. The Senate subsequently rejected the House proposal, initiating behind-the-scenes talks to move past the stalemate. With both chambers having reached an impasse on specific dollar amounts and the scope of additional economic aid, a near-term path forward remains uncertain.  

Much of the confusion arising from Paycheck Protection stems from the two-tiered roll out for loan eligibility. On April 3, the SBA began processing loans for small businesses and sole proprietors. A week later, on April 10, the agency opened the program to independent contractors and the self-employed, thereby extending the program to large segments of the horse industry. SBA had not previously operated large-scale loan programs for these two classes of borrowers, therefor creating an environment of uncertainty for borrowers and lenders. 

Many members of the horse industry have reported long waiting times from their banks to learn details related to their applications. To give perspective on the bottlenecks, the Administration reported earlier this week that it had processed approximately 1.4 million applications and disbursed slightly over $70 billion to banks. While policymakers intend the program to operate on a “first come, first served” basis, the depletion of funds should not necessarily dissuade potential borrowers from moving forward with an application. Many banks, especially larger institutions including Wells Fargo, for example, have stated that they will continue to process Paycheck Protection loans, pending additional funds from Congress. AHC will continue to keep members informed of guidance and developments related to small business loans and other economic relief measures. For a detailed overview of Paycheck Protection, go to the following link: https://home.treasury.gov/system/files/136/PPP%20--%20Overview.pdf.    

From the American Horse Council.