Additional $484 Billion Coronavirus Interim Relief Package Replenishes PPP

April 24, 2020
SmithAmundsen Financial Services Alert

On Friday, April 24, 2020, President Trump signed into law the “Paycheck Protection Program and Health Care Enhancement Act” (the “Enhancement Act”). The Enhancement Act provides approximately $484 billion in supplemental funding for many key programs under the original CARES Act, most significantly for the Paycheck Protection Program (PPP) for small businesses. This alert provides information on the new provisions in the legislation that expand the PPP and the EIDL program.

According to the Congressional Budget Office, the $484* billion package provides:

*Components may not sum to total due to rounding.

The Set-Aside: Under the Enhancement Act, the following loan amounts will be set aside under the PPP:

The purpose of this set-aside is to make the PPP more accessible for underbanked businesses. Such access has been identified as a challenge of the initial round of PPP funding, as small community businesses and financial institutions competed with larger businesses, who often had pre-existing relationships with large, traditional banks, for the same funding pool.

Under the Enhancement Act, “credit union” is defined as a state credit union or a federal credit union (as those terms are defined, respectively, in section 101 of the Federal Credit Union Act (12 USC 1752)).

Also under this legislation, the definition of a “community financial institution” includes:

Small Agricultural Entities: The Enhancement Act also amends the definition of “eligible entity” for EIDL grants and loans to include “agricultural enterprises” with fewer than 500 employees (as defined in section 18(b) of the Small Business Act (15 USC 647(b)).