Paycheck Protection Program and Health Care Enhancement Act: What's In It?

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As of Tuesday, April 21st, the Senate has passed the Paycheck Protection Program and Health Care Enhancement Act (PPP & HCE Act), a $484 billion package which will now go to the House of Representatives for consideration. It is anticipated that this bill could pass the House as early as Thursday, and President Trump is expected to sign it into law soon after.

PPP & The CARES Act

Following the passage of the $2.2 trillion CARES Act stimulus package at the end of March, one of the most talked about provisions was the Paycheck Protection Program (PPP). The CARES Act had earmarked $349 billion for PPP, which was designed to help small businesses cover their payroll, benefits, utilities, and rent and mortgage payments.

However, it came as no surprise that these loans – forgivable if certain requirements were met – ran out extremely quickly, as small businesses flocked to banks to apply for relief. On paper, $349 billion sounded like a lot of money – but it was “destined to be oversubscribed from the start.”

The public demand for more funding allocated to the PPP was a major factor in driving the creation of the latest bill.

What’s in the PPP & HCE Act?

• $310 billion for the SBA’s Paycheck Protection Program
  
• $60 billion for the SBA’s economic injury disaster loans and grants, including:
  
  ○ $50 billion for economic injury disaster loans - each loan can be up to $2 million with interest rates not to exceed 4% and long-term repayment periods of up to 30 years;
  
  ○ and $10 billion for grants of up to $10,000 that do not have to be repaid.
  
  
• Additional funds are provided for the SBA to administer these programs.
  
• $100 billion in emergency supplemental appropriations, $75 billion of which is designated for hospitals and health care providers and $25 billion of which is designated to ramp up COVID-19 testing.

It’s important to note that banking industry groups have said that the money set aside to “replenish the emergency loan program for small businesses impacted by the coronavirus pandemic is likely already all spoken for.” Due to the volume of applications already sent to the Small Business Administration, it’s likely that “much, if not all, the new money will go to those already in the queue.”

We expect to have more updates on this legislation soon, although remember that it has not yet been signed into law. Please stay tuned and contact our office if you have any questions.