All co-ops in the USA can apply for the Economic Injury Disaster Loan and Grant and the Paycheck Protection Program, which received an extra US$320bn (£258bn) on 23 April.
The Paycheck Protection Program (PPP) was created by the CARES Act, signed into law on 27 March. The act is an emergency relief bill to address the impact of Covid-19 on the national economy.
As part of the $2.2tn (£1.78tn) economic stimulus package, the government provided $349bn (£281bn) through the PPP to help businesses keep workers on their payroll. The first round of PPP ran out in just two weeks and on 23 April, Congress approved an additional $320bn, through a new bill signed into law on 24 April.
The measure was welcomed by the National Co-operative Business Association, NCBA-Clusa, which advised member co-ops to apply for funding. Applications for the loans can be made at http://covid19relief.sba.gov/.
“These supplemental funds are a critically important step to helping co-operatives weather the hardships caused by Covid-19. NCBA-Clusa appreciates Congress’ bipartisan work to provide additional funds to these programs and help more small businesses access financing by setting aside funds for credit unions and CDFIs,” said Doug O’Brien, president and CEO. “We are eager to continue our work on behalf of cooperative businesses to include the eligibility and development of co-ops in future emergency relief and recovery bills.”
NCBA-Clusa is advising co-ops eligible for the SBA Paycheck Protection Program and in need of these funds to contact their local lender to begin the application process.
Issued through private lenders, PPP loans are 100% guaranteed by the SBA. The loans do not require a personal guarantee, a former requirement that prevented worker and consumer co-ops from accessing their SBA loan programmes in the past.
The bill sets aside funding for small credit unions, community development financial institutions, minority depository institutions, and community banks.
“We thank the House of Representatives for sending to President Donald Trump’s desk legislation that will give over $300bn in additional PPP funding aimed directly at assisting America’s small businesses and local communities,” said Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions (Nafcu).
“The coronavirus pandemic has presented many challenges for our nation, and this legislation will ensure small businesses and underserved communities across the country have access to the funds they need to help navigate current economic conditions. In such uncertain and difficult times, credit unions stand ready to serve those facing financial hardships, and we thank Congress for ensuring credit union members benefit from these important funds.”
The bill adds $10bn to the Economic Injury Disaster Loan (EIDL) program, for which all co-operatives are eligible. Co-ops eligible for PPP loans can apply for the Economic Injury Disaster Loan as well.
The loan programme reopened on 27 April. To avoid the system being overloaded, the Small Business Administration (SBA), which administers the Paycheck Protection Program (PPP), told lenders they could each submit a maximum of 350 claims per hour.
NCBA-Clusa has released a number of the resources for co-ops needing to find out more about Economic Injury Disaster Loan and Paycheck Protection Program, which can be accessed online.