On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act into law, which implemented an array of programs aimed at providing economic support to impacted areas of the economy. Now, the Paycheck Protection Program and Health Care Enhancement (“PPPHCE”) Act seeks to allocate approximately $480 billion in additional funding to bolster select CARES Act programs. The Senate passed the measure on Tuesday, April 21, 2020 and a House vote is scheduled for Thursday, April 23rd. The President is expected to sign the bill as soon as possible.
The CARES Act previously allocated $349 billion to fund the Paycheck Protection Program (“PPP”). The PPP provided forgivable loans to small businesses (generally with 500 employees or fewer) in order to incentivize these employers to retain and continue paying their staff for the duration of the COVID-19 public emergency. The original PPP funds ran out on April 16, 2020, and the PPPHCE allocates an additional $310 billion in funding towards the program. $30 billion of the new funding is set aside for loans made by federally insured lenders with $10-$50 billion in assets, and an addition $30 billion is set aside for community financial institutions with assets under $10 billion.
The PPPHCE also expands the funding available to the Emergency Economic Injury Grant program. These grants are available to small businesses (generally fewer than 500 employees) who have applied for assistance under the Economic Injury Disaster Loan program, and are meant to be furnished as an advance on the loan. Eligible businesses may receive up to $10,000 through the EEIG, which need not be repaid, even if the business is turned down for an EIDL.
The PPPHCE allocates an additional $75 billion for the Public Health and Social Services Emergency Fund for hospitals and healthcare providers to assist in responding to the COVID-19 emergency, and to help cover revenues lost as a result of postponement or cancellation of elective procedures.
The bill also sets aside additional funds for vaccine development and testing, among other appropriations.
For more information about how these new appropriations may affect your business, please contact our Corporate or Employment departments.
The content of this post is for informational purposes only and should not be construed as legal advice or legal opinion. You should consult a lawyer concerning your specific situation and any specific legal question you may have.