Update: Additional Funding Available for Small Business PPP Loans
On April 24, 2020, President Donald Trump signed the Paycheck Protection Program and Health Care Enhancement Act (“COVID-19 Enhancement Act”) into law. The COVID-19 Enhancement Act was the latest law passed in response to the COVID-19 pandemic, and provides an additional $484 billion of funding. The Act increases the available funds for the Paycheck Protection Program (“PPP”) Loans, and also provides funding to healthcare providers. A brief summary of the law follows:
Additional Funding for Paycheck Protection Program
The most relevant impact of the COVID-19 Enhancement Act for small businesses is that it provides an additional $310 billion in new funds for PPP Loans from the Small Business Administration. The initial $349 billion that the CARES Act set aside for these loans ran out less than two weeks after the funds were made available. You can find more information on the CARES Act and availability of PPP Loans here.
Of the $310 billion in new funds that the COVID-19 Enhancement Act provides, $60 billion has been set-aside for community-based lenders and mid-sized banks, which can better serve smaller businesses and minority-owned firms. These businesses are less likely to have an existing relationship with a larger bank and were more likely to be unable to get PPP Loans in the first round of funding as a result.
Additional Funding for SBA Economic Injury Disaster Loans
The COVID-19 Enhancement Act made additional funds of $10 billion available to the Small Business Administration (“SBA”) for economic injury disaster loans and grants in response to COVID-19.
Grants to Hospitals and Healthcare Facilities
The COVID-19 Enhancement Act provides $75 billion in grants to hospitals and healthcare providers for health care related expenses or lost revenues that are attributable to the COVID-19 outbreak.
Funding to Increase COVID-19 Testing
The Act set-aside $25 billion for expenses related to researching, developing, and administering COVID-19 tests in order to effectively monitor and suppress COVID-19.
In addition, the COVID-19 Enhancement Act also provided additional appropriations to the Department of Health and Human Services (HHS) and the SBA in response to COVID-19. If you have any questions about the COVID-19 Enhancement Act and how it affects you or your business, please contact one of our attorneys or visit our website.