The Paycheck Protection Program and Health Care Enhancement Act (the Enhancement Act) was passed on April 24, 2020, and provides $484 billion in additional funding. Critically, the Enhancement Act includes additional funding for the Paycheck Protection Program (PPP) and the Emergency Injury Disaster Loan program (EIDL), both of which had run out of funding.
This alert highlights the relevant provisions of the Enhancement Act for businesses that have applied for or intend to apply for a PPP loan or an EIDL loan.
How much additional PPP and EIDL funding was provided by the Enhancement Act?
The Enhancement Act provides additional funding for PPP and EIDL loans. The PPP will receive an additional $310 billion and the EIDL program will receive an additional $60 billion.
Are there any specific allocations for the additional PPP funds?
Yes, of the $310 billion allocated for the PPP, $30 billion is earmarked for lenders with less than $50 billion in assets and $30 billion is earmarked for lenders with less than $10 billion in assets.
Are there any specific allocations for the additional EIDL funds?
Yes, of the $60 billion allocated for the EIDL program, $50 billion is earmarked for loans and $10 billion is earmarked for emergency grants.
Does the Enhancement Act change how the loan programs work?
No, the Enhancement Act does not change the process for obtaining a PPP loan or an EIDL loan, or the rules governing the loan programs. Borrowers and lenders should continue to rely on the CARES Act and the subsequent guidance issued by the U.S. Department of Treasury and the Small Business Administration (SBA).
What should I do if I have applied for but not yet received a PPP loan?
If you have already applied for a PPP loan and are waiting for approval or funding, you should contact your lender as soon as possible to discuss whether your lender needs any additional information to process your loan application.
Will there be any new information on the CARES Act loan programs?
Yes, many borrowers have had questions about the PPP loan forgiveness process and criteria. In the SBA’s interim final rule published on April 15, 2020, the SBA noted that it will issue additional guidance on loan forgiveness.
We expect that there will be further guidance on the CARES Act and available Federal loan programs.
