James “Jim” L. Johnson
*CARES Act UPDATE: After a brief lapse of disaster relief appropriations, Congress on April 23rd, 2020 overwhelmingly passed legislation providing an additional $484 billion for small businesses and hospitals in the latest round of emergency aid to combat the economic fallout from the COVID-19 pandemic. The President is expected to quickly sign the package entitled the Paycheck Protection Program and Health Care Enhancement Act (PPPHCE) into law, which represents the fourth bill to move through Congress over the last two months to address the pandemic. PPPHCE is being referred to by the media and others as “Phase 3.5” or “COVID 3.5”.
The bill adds over $310 billion in new funds to the extremely popular Paycheck Protection Program (PPP). PPP provides forgivable loans to small businesses affected by the pandemic. Congress originally enacted PPP on March 27 when it passed the third relief bill, the Coronavirus Aid, Relief and Economic Security Act (CARES Act). PPP was originally funded with approximately $349 billion, and was quickly exhausted. Phase 3.5 expressly designates $60 billion of the $310 billion in PPP funds for small lenders and community banks.
Phase 3.5 also appropriates an additional $50 billion for emergency grants and loans through the SBA’s Disaster Loan Programs and an additional $10 billion for Emergency Economic Injury Disaster funds. For additional information on this legislation, see my previous article on how CARES Act revamped SBA’s important disaster loan program https://wawlaw.com/the-coronavirus-aid-relief-and-economic-security-cares-act/ .
Small businesses who need additional assistance or perhaps missed out on the initial relief are strongly encouraged to act quickly to acquire this additional disaster relief assistance. It is expected that the SBA will issue guidance within the next days so that lenders can begin accepting applications by the beginning of next week.