Congress Passes Paycheck Protection Program and Health Care Enhancement Act

Today (April 23, 2020), Congress passed, and the President is expected to quickly sign, the 4th piece of coronavirus-response legislation that includes $484 billion in relief for small businesses, hospitals and funding for COVID-19 testing. The Paycheck Protection Program and Health Care Enhancement Act provides an additional $310 billion for the Paycheck Protection Program (PPP), a new provision worth $60 billion for economic disaster loans, $75 billion for hospitals and $25 billion for expanded testing. A breakdown of the bill is below. Please note that as soon as we have had an opportunity to review the Act in detail, we will provide more information to you.

Paycheck Protection Program

Of the $310 billion approved for the Paycheck Protection Program, $60 billion is dedicated for smaller lending facilities described in the bill as “community financial institutions, small insured depository institutions and credit unions with assets less than $10 billion.”

Applications and Submissions:

If your business has already applied for a PPP loan and the loan has not been officially approved, we suggest contacting the lender responsible for the PPP loan application. You should request an update on the approval status of the loan and determine if there are any open items that need to be addressed that can help the application more forward quickly towards loan approval.

According to Nick Simpson, a spokesman with the Consumer Bankers Association, a majority if not all of the funding included in this new legislation is already exhausted through existing applications.

Economic Injury Disaster Loans and Grants

This $60 billion provision includes $10 billion for grants under the Emergency Economic Injury Disaster Loan (EIDL) program and $50 billion for disaster recovery loans.

Agriculture businesses are now eligible for Economic Injury Disaster Loans and Emergency Grants. To be eligible, businesses must have 500 or less employees.

The $50 billion for disaster recovery loans and the $10 billion in grants will remain available until expended, to prevent, prepare for, and respond to coronavirus, domestically or internationally.

If you have previously applied for disaster loans with the SBA:

Jeff Cunningham, an Atlanta attorney, says “The Small Business Administration (SBA) reports four ways to check status – each one reported by many users to be ineffective, but worth trying.  As with the PPP, regulations issued after introduction materially changed the initial concept. Questions about these changes, coupled with sheer volume have likely overwhelmed the humans manning the phones and computers at the SBA.” Cunningham offers these tips for checking the status of existing EIDL applications:

• SBA Website: Check the status of your application through the SBA website – unless you applied through the expedited COVID-19 portal. If you used the expedited COVID-19 portal, you can’t use the SBA website to check. Instead, log into the SBA Economic Injury Disaster Loan Portal using your registration email address or username and password. Once in, you should be able to check your application status.
• Disaster Loan Assistance Portal: You should also be able to check your loan status through the Disaster Loan Assistance Portal. You will also need your registration username and password. You should be able to see information related to your application including the application number, the current status, and the date that the status was last updated.
• Phone: Check the status of your EIDL application by phone, specifically if you submitted your application online or by mail. Call 1-800-659-2955 (the SBA Disaster Assistance customer service center). You may be able to get answers by calling the toll-free number regardless of the application method.  Good news:  you can talk to a human (presumably).  Bad news:  hold time may seem interminable.
• Email: Email the SBA to ask about the status of your loan: [email protected]. Response time on this method has not been fast.   Make sure to provide your legal name and your application number (if you applied online), and consider including business name, federal tax ID, or other identifying information.

Hospitals and Testing

The bill authorizes $75 billion to hospitals and eligible healthcare providers, and $25 billion to expand on COVID-19 testing.  A significant portion of the $75 billion is aimed at hospitals in rural areas.

Summary

In the coming days, we will be providing additional guidance on the Paycheck Protection Program and Health Care Enhancement Act including more information on PPP loan forgiveness, Economic Injury Disaster Loans and grants, and more.

Smith and Howard stands ready to help you and your business navigate the Paycheck Protection Program and Health Care Enhancement Act and other business impacts related to COVID-19. Please contact your Smith and Howard advisor by completing the contact form below.

If you are looking for other information related to COVID-19, visit our COVID-19 hub.