On April 24th, President Trump signed into law an amendment of the CARES Act, officially titled the “Paycheck Protection Program and Health Care Enhancement Act” (the “Enhancement Act”). The Enhancement Act includes an additional $310 billion in funding for the Paycheck Protection Program (“PPP”), an additional $10 billion for Economic Injury Disaster Loan (“EIDL”) program, and $100 billion for a Public Health and Social Services Emergency Fund (“PHSSEF”).
Expansion of the PPP
With much fanfare, the initial $349 billion set aside for the PPP in the original CARES Act legislation at the end of March lasted less than two weeks. Because so many PPP loan applications were in process when the funds ran out, it is expected that the additional $310 billion approved with this amendment will be tapped out even faster. While the Enhancement Act didn’t fundamentally change how the PPP works, including who is eligible for the program, it did attempt to address complaints of many small businesses by setting aside $60 billion of the total for lending through smaller financial institutions – $30 billion by institutions with assets between $10 billion and $50 billion, and $30 billion for community financial institutions with less than $10 billion in assets.
The PPP’s less famous and older cousin, the EIDL, is an existing SBA program that was expanded with $10 billion from the CARES Act. Like the PPP, these funds were was also used up quickly. The Enhancement Act added another $10 billion to the EIDL and expanded it to allow agricultural enterprises with 500 or fewer employees to participate.
Public Health and Social Services Emergency Fund
Lastly, the Enhancement Act set aside $100 billion in an emergency fund related to the pandemic. $75 billion of that is earmarked to help health care providers with health care related expenses and/or lost revenues attributable to the coronavirus, and $25 billion is earmarked for research, development and administration of COVID-19 testing.