Paycheck Protection Program and Health Care Enhancement Act Signed into Law

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On April 24, 2020, President Trump signed the Paycheck Protection Program and Health Care Enhancement Act (Enhancement Act) which provides additional direct appropriations for the Paycheck Protection Program (PPP). The PPP was authorized on March 27, 2020, in the Coronavirus Aid, Relief and Economic Security Act (CARES Act). Under the CARES Act, the Small Business Administration (SBA) received funding and authority to establish the PPP to assist small businesses nationwide adversely impacted by the COVID-19 emergency. On April 16, 2020, the SBA announced that it had fully committed the $349 billion appropriated in the CARES Act for PPP loans and was no longer accepting new applications for the PPP.

The authorizations and appropriations included in the Enhancement Act include the following:

Amendments to the PPP, Economic Injury Disaster Loans (EIDL), and Emergency Grants

  • Increases the authorization level for the SBA’s PPP by an additional $310 billion.
  • Increases the direct appropriation for the SBA’s PPP by an additional $321 billion.
  • Sets aside $60 billion specifically for Insured Depository Institutions, Credit Unions, and Community Financial Institutions1 for the PPP.
  • $30 billion of the $60 billion set aside are for loans made by Insured Depository Institutions and Credit Unions that have consolidated assets between $10 billion and $50 billion.
  • $30 billion of the $60 billion set aside are for loans made by Community Financial Institutions, Small Insured Depository Institutions and Credit Unions with consolidated assets less than $10 billion.
  • Increases the authorization for the Emergency EIDL Grants from $10 billion to $20 billion.
  • Allows an agricultural enterprise as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)) with not more than 500 employees to be eligible to receive EIDL and Emergency Grants.

SBA Matters

  • Appropriates an additional $2.1 billion for the Salaries and Expenses account of the SBA. to remain available until Sept. 30, 2021.
  • Appropriates an additional $50 billion for the Disaster Loans Program Account of the SBA to remain available until expended.
  • Appropriates an additional $10 billion for Emergency EIDL Grants of division A of the CARES Act to remain available until expended.

We are continuing to monitor for additional information and additional guidance around these new appropriations that may come from the SBA and the Department of the Treasury.

For questions or additional information, please contact DHG at CARESActQuestions@dhg.com.

Footnotes

  1. Defines Community Financial Institutions as a community development financial institution (as defined in section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994), a minority depository institutions (as defined in section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA)), certified development companies (under title V of the Small Business Investment Act of 1958), and microloan intermediaries (as defined by section 7(m)(11) of the Small Business Act).

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