Partners Cheer New $310B Funding Deal For Paycheck Protection Program

The Senate approved a second round of funding for the program to support small businesses, after the initial $349 billion in funding quickly ran out.

Solution providers applauded the U.S. Senate's approval of a second round of funding for the federal Paycheck Protection Program, worth $310 billion, saying it will be crucial to helping keep small businesses afloat during a time of economic upheaval.

The Senate approved the funding Tuesday with the passage of a $484 billion bill to benefit small businesses and hospitals, amid the COVID-19 coronavirus pandemic and the resulting economic fallout. The House is reportedly expected to pass the bill on Thursday, and President Donald Trump has indicated he will sign it into law.

[Related: Paycheck Protection Program: 5 Things You Need To Know]

The additional Paycheck Protection Program (PPP) funding comes after the initial $349 billion in funding for the program ran out quickly, prompting some solution providers to strongly criticize the program’s rollout.

Mark Sanchez, CEO of Loganville, Ga.-based CommQuest, says his firm is among the solution providers that applied in the initial round, but was unable to receive approvals before the funding program was exhausted.

"I'm very happy they've decided to do the right thing by small businesses," said Sanchez, whose firm employs one other full-time individual besides himself. "Small businesses are the lifeblood of this country, and if they're not investing in those individuals, that's a misplaced use of money."

The PPP provides loans for up to two months of payroll costs plus an additional 25 percent for businesses of 500 or fewer employees, with a cap of $10 million. Much of the 1-percent interest rate loans could be forgiven if businesses do not lay off workers and utilize the funds for payroll and other designated purposes.

The new round of PPP funding "is a good thing for a lot of different reasons," said Bob Venero, CEO of Holbrook, N.Y.-based Future Tech Enterprise, No. 101 on CRN's Solution Provider 500 for 2019. "No. 1, it shows that our government is once again in support of helping small businesses continue to function and keep people employed. That's one of the most important things. And No. 2, it also shows that our government is a little bit more flexible on seeing what works, what doesn't work, how do we adjust it and continue to support the American people and the businesses."

The funding is crucial for supporting the solution provider community, in particular, because "we're the people that are helping large corporations and small corporations to continue to function from an IT perspective and be able to work from home," Venero said.

Allen Falcon, CEO of Westborough, Mass.-based Cumulus Global, said a major challenge for solution providers right now is that "if the customers are struggling--either to stay open or to pay the monthly recurring--then solution providers may not have the cash on hand to float that until things get better, or to deal with vendor contracts for companies that are no longer paying them."

Running low on cash, "you're faced with laying off people and maybe not being able to provide good service," Falcon said. "But getting a PPP loan and being able to maintain your staffing, or most of it, for at least the next eight weeks is definitely a good thing."

Michael Goldstein, president and CEO of Fort Lauderdale, Fla.-based LAN Infotech, called the approval of new PPP funding on Tuesday a "timely move" for small businesses around the U.S.

"I think everybody needs this relief, and we couldn't get it soon enough," Goldstein said.

After seeing the fate of the first round of PPP funding, "I think that shows the overwhelming need for it--to have that initial salvo of money be drained so quickly," he said.

Overall, "this is definitely helping with some of the short-term, immediate needs," Falcon said. "But I think there's going to be more needed for the long-term recovery."

The bill passed by the Senate on Tuesday also includes $60 billion for a different U.S. Small Business Administration loan and grant program, along with $75 billion for hospitals and $25 billion for COVID-19 tests.

The PPP got off to a rocky start when the Small Business Administration launched it April 3. Some lenders, already besieged by an influx of applicants, received late guidance from the government that forced them to change their applications after they had begun accepting them. In addition, the SBA’s online application portal crashed on April 6, according to reports.