Based on news reporting, we understand that Congress and President have collectively agreed on $300 billion in additional funding for the Paycheck Protection Program. The circulated draft of the “Paycheck Protection Program and Health Care Enhance Act” makes no changes to the eligibility or terms of the PPP, but does authorize an additional $310 billion in funds, raising the total funding level for PPP loans to $659 billion.
The Paycheck Protection Program and Health Care Enhance Act would also increase the amount authorized for the SBA to ultimately forgive to $670 billion, presumably recognizing an intent to also be in position to forgive interest in additional to principal.
While the Paycheck Protection Program and Health Care Enhance Act does not alter the eligibility or terms for either borrowers or lenders, it does provide some protected classes of lenders who are ensured a set aside of a portion of the expanded PPP authorization. Specifically, depository institutions and credit unions with between $50 billion and $10 billion in consolidated assets will be ensured the ability to issue, in the aggregate, at least $30 billion in loans guaranteed by the SBA under the PPP. Depository institutions and credit unions with less than $10 billion in consolidated assets, as well as community development financial institutions (CDFIs), minority depository institutions (MDIs), and certain state development companies certified under Title V of the Small business Investment Act will be ensured the ability to issue, in the aggregate, at least $30 billion in loans guaranteed by the SBA under the PPP.
Presumably, other non-depository institution approved SBA lenders will only be able to approve PPP loans out of the general expanded PPP authorization regardless of the size of the other lenders.
As of December 31, 2019, there were 43 banks in the United States with over $50 billion in assets, holding aggregated consolidated assets of approximately $13.6 trillion.
As of December 31, 2019, there were 100 banks in the United States with between $10 billion and $50 billion in assets, holding aggregated consolidated assets of approximately $2.2 trillion.
As of December 31, 2019, there were 5,043 banks in the United States with less than $10 billion in assets, holding aggregated consolidated assets of approximately $2.9 trillion.
With 4,975 lenders making PPP loans in the original tranche, it looks like most depository institutions are participating, regardless of size.
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