PPP and Health Care Enhancement Act Signed into Law

The government enacted more help for small businesses and farmers and ranchers on Friday, April 24, with an amendment to the original CARES Act.

The new Paycheck Protection Program and Health Care Enhancement Act:

• Provides an additional $310 billion for the PPP.
• Adds $50 billion to the SBA Disaster Loan Program.
• Adds $10 billion for the Economic Injury Disaster Loan (EIDL) emergency advance grants.
• Funds other critical needs that have arisen as a result of COVID-19.

Within the next few days, Small Business Administration lenders will likely be able to process and submit loan applications. Borrows should apply right away because it’s possible the funding will go fast. Currently, some lenders aren’t taking additional applications because of the backlog from the first round. But with this new funding amount, that may change.

Those in rural and underserved areas had difficulty accessing funds during the first PPP round. The new act aims to remedy that by targeting the dollars. Of the $310 billion in the act, about $30 billion is meant for financial institutions with $10 billion to $50 billion in assets. Another $30 billion is aimed at financial institutions with less than $10 billion in assets.

Farmers and ranchers could apply for the first round of PPP loans but not EIDL*. However, in this second round, they’re now eligible to apply.

Other funding areas include:

• $75 billion for eligible healthcare providers for COVID-19-related costs.
• $25 billion for virus testing, about half of which is for state and local governments.
• $50 billion for the SBA’s “Disaster Loans Program Account” to cover the cost of direct loans authorized by Section 7(b) of the Small Business Act.

If you have questions during the application process, please reach out to us right away.

*As of 4/28/2020, the SBA loan portal to apply for an EIDL loan has not been reopened. Per the SBA website, they "will resume processing EIDL Loan and Advance applications that are already in the queue on a first come, first-served basis" and "will provide further information on the availability of the EIDL portal to receive new applications (including those from agricultural enterprises) as soon as possible."

This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.