August 4, 2020

Volume X, Number 217

August 03, 2020

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Congress Approves Additional Funding for Small Business Loans and Aid for Hospitals and Testing

On April 24, 2020, President Donald Trump signed into law the Paycheck Protection Program and Health Care Enhancement Act (Enhancement Act), which provides an additional $484 billion in funding for distressed small businesses. The aid package passed both houses of Congress with broad bipartisan support and replenished the depleted Paycheck Protection Program (PPP), designed to keep workers on payrolls, and Economic Injury Disaster Loan (EIDL) program, offering loans and emergency grants. The Enhancement Act also provides funding for hospitals and coronavirus testing.

Under the Enhancement Act, Congress approved:

  • Additional funding of $310 billion for PPP loans. To ensure that minority, rural, and other "underbanked" businesses have access to funding, Congress set aside i) $30 billion for banks and credit unions with assets between $10 billion and $50 billion and ii) $30 billion for community banks, credit unions, and "community financial institutions" with assets under $10 billion.
  • Additional funding of $50 billion for disaster recovery loans and $10 billion for grants under the EIDL program.
  •  $75 billion for reimbursement to hospitals and healthcare providers for COVID-19-related expenses and lost revenue.
  • $25 billion for expenses necessary to research, develop, manufacture, purchase, administer, and expand capacity for COVID-19 tests.

Aside from Congress providing additional funding, there were few changes to the PPP and EIDL programs.

We expect the Small Business Administration (SBA) and lenders to resume processing applications for both programs immediately. Given the enormous demand, the additional funds will likely be exhausted in a matter of days. If you have not already submitted an application for a PPP loan, we suggest that you contact your lender immediately to begin the application process. If you are interested in an EIDL loan or grant, you may complete your application on the SBA website.

The SBA and the Treasury Department have indicated that they will provide additional guidance soon, in particular regarding the forgiveness aspects of the PPP. We continue to monitor the situation and will provide updates as details become available.

 

© 2020 Much Shelist, P.C.National Law Review, Volume X, Number 115

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About this Author

Michael A. Zalay Corporate Attorney Much Shelist Chicago, IL
Principal

Michael is an accomplished corporate attorney who represents clients in a variety of business matters. He is experienced in structuring and negotiating business transactions for clients ranging from startups to established companies. Michael regularly advises clients on acquisitions and dispositions of businesses and real estate, corporate and LLC formation and governing documents, private placements, stock sale and asset purchase agreements, supplier and distribution agreements, professional services agreements, and commercial and retail leases. He also assists clients in the formation of...

312.521.2668
Jonathan D. Sherman, Litigation Lawyer, Much Shelist Law Firm
Principal

Jonathan D. Sherman is a trusted legal advisor and litigator with more than 30 years of experience counseling publicly traded and privately owned companies in numerous industries, including consumer products, food, manufacturing and real estate. As outside general counsel, Jon helps clients determine business strategies and manage legal risks; as national litigation counsel, he analyzes potential threats, develops effective responses, and supervises lawsuits in federal and state courts across the country.

Over the course of his career, Jon has successfully resolved disputes involving contracts, insurance coverage, fiduciary duties and trade secrets, among other matters. He is equally comfortable in the courtroom and in the boardroom, and delivers customized training to executives, directors and key personnel on issues such as antitrust compliance, employment law and dispute resolution. Jon draws on an extensive network of professional advisors to help businesses develop proactive solutions that address their most pressing legal needs. He also has significant experience representing attorneys and other professionals in disciplinary and malpractice cases. 

312-521-2687
Jeff Schwartz, bankruptcy attorney, Much Shelist law firm
Principal

Jeffrey M. Schwartz, a Principal in the firm's Creditors' Rights, Insolvency & Bankruptcy group, focuses his practice on the representation of secured and unsecured creditors in business reorganizations under Chapter 11 of the Bankruptcy Code and in out-of-court restructurings. He also represents buyers and sellers of financially distressed companies and distressed debt, and regularly advises lenders, creditors' committees, indenture trustees, debtors and other parties involved in bankruptcy-related matters. 

312-521-2626