Round 2 of the Paycheck Protection Program (PPP) has been approved by Congress and signed by President Trump, providing another $310 billion in funding for small businesses.
Reports from various news sources, however, predict that all $310 billion will be needed for those businesses already in que from the first round that did not receive funding.
And even the new round of funding may not be enough to meet the demand that already exists.
What does this mean for you?
- If you submitted your PPL application for Round 1 but were not approved prior to funding running out, you should not have to reapply. It is important though that you contact your financial institution to confirm that they have your information ready to submit for this new round of funding.
- You should remain in constant contact with your financial institution to confirm the status of your application. Many banks, especially larger ones, did not keep their customers updated on status of their applications during Round 1, so it is important for you to be proactive in doing so.
- If you did not submit an application for Round 1, it is still possible to apply, but understand that you will likely be behind those already in line.
- If you have not applied yet, you need to immediately download the form and pull all the necessary information. You will need to apply through an approved SBA lender and most financial institutions will only accept applications from existing business customers.
DOWNLOAD THE PPP APPLICATION
The federal government now projects that it will spend more than $145.6 billion on direct support for Canadians as a result of the COVID-19 crisis.
Those direct support programs account for approximately one fifth of the overall tally of the measures the government has announced related to the pandemic.
Ottawa estimates that overall total — including measures to protect Canadians health and safety and to provide business and tax liquidity support as well as the direct support for individuals, businesses and sectors — amounts to more than $817 billion.
But much of that is not spending that will end up on the books. For example, a large portion, $300 billion, is a measure by the Office of the Superintendent of Financial Institutions (OFSI) to free up capital for the banks.
Another big part of that overall total are tax deferrals and credit and loan guarantee programs:
- Credit and liquidity supports through the Bank of Canada and CMHC are projected at $200 billion.
- Income and sales tax deferrals are estimated at $85 billion.
- Liquidity support for businesses, homeowners and the agricultural sector is estimated at more than $286 billion.
But while there is a cost associated with those programs, deferrals, credit support and monetary measures essentially just put off when the government gets paid.
The additional emergency funding and the direct support measures that will have the biggest impact on the deficit and debt in the government’s financial books.
- $73 billion: Canada emergency wage subsidy
- $35 billion: Canada emergency relief benefit
- 15.3 billion: Canada emergency business account
- $5.5 billion: GST credits
- $9 billion: Financial aid to students
- $1.7 billion: Orphan well clean up