Business Law Alert - Paycheck Protection Program Extended
On April 24, 2020, the Paycheck Protection Program and Health Care Enhancement Act (Enhancement Act) became law. The Enhancement Act provides an additional $484 billion in funding for impacted small businesses. The Enhancement Act replenishes the Paycheck Protection Program (PPP), designed to keep workers on payrolls, and Economic Injury Disaster Loan (EIDL) program, offering loans and emergency grants. Funding for these programs was exhausted in the past few weeks. The Enhancement Act also provides funding for hospitals and coronavirus testing.
Specifically, the Enhancement Act provides:
Additional funding of $310 billion for PPP loans. To ensure that minority, rural and other "underbanked" businesses have access to funding, Congress set aside (1) $30 billion for smaller banks and credit unions with assets between $10 billion and $50 billion, and (2) $30 billion for community banks, credit unions and “community financial institutions” with assets under $10 billion.
Additional funding of $60 billion for EIDL loans, with $10 billion of this amount available for grants under this program (i.e., $10,000 per applicant).
$75 billion for reimbursement to hospitals and healthcare providers for COVID-19 related expenses and lost revenue.
$25 billion for expenses necessary to research, develop, manufacture, purchase, administer and expand capacity for COVID-19 tests.
Small Business Administration (SBA) and approved lenders are expected to resume processing applications for both programs immediately. Enormous demand for these programs is expected and it is likely that the additional funds will be exhausted quickly.
If you are seeking assistance under these programs, we strongly encourage you to contact your lender immediately to begin the application process. EIDL loans or grants are obtained directly through the SBA.
We expect the SBA and the Treasury Department to issue additional guidance on these programs soon, in particular regarding the forgiveness aspects of the PPP. We will provide updates as additional guidance is available.
If you have any questions about this Alert, or if you would like legal assistance in light of the COVID-19 pandemic, please contact the Aronberg Goldgehn attorney with whom you work.
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