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Passage of the Paycheck Protection Program and Health Care Enhancement Act

On April 24, 2020, the President signed the Paycheck Protection Program and Health Care Enhancement Act (the “Enhancement Act”) into law, providing, among other things, more than $250 billion in additional unrestricted funds for the Paycheck Protection Program (the “PPP”) and an additional $60 billion for smaller lending institutions, with $30 million earmarked for lenders with assets valued at less than $10 billion, and $30 billion for lenders with assets between $10-50 billion.


On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “Cares Act”) into law. The PPP, one of the CARES Act’s featured relief programs, was originally a $349 billion loan guarantee program through which financial institutions can make forgivable loans up to $10,000,000 to small business concerns, business concerns with less than 500 employees, and certain other eligible borrowers. The CARES Act also created a $10 billion grant program under the previously-created $3.5 billion Economic Injury Disaster Loan program (the “EIDL”), operated directly by the United States Small Business Administration (the “SBA”).

By April 17, 2020, both the PPP and EIDL had exhausted their initial appropriations, leaving many PPP loan applications pending while Congress negotiated additional funding for the programs and the terms of the Enhancement Act.  In addition to topping off the PPP, the Enhancement Act also increased appropriations for the EIDL program itself (an additional $50 billion) and the EIDL grant program (an additional $10 billion).

Impact of the Enhancement Act on loan applications under the PPP

As a result of the Enhancement Act, the SBA will resume accepting PPP loan applications on Monday, April 27, 2020 at 10:30AM EDT from approved lenders on behalf of any eligible borrower. The SBA has advised approved lenders to resume processing loan applications that were previously submitted by eligible borrowers as well as new applications, and to resume disbursing funds.

Given the speed with which previously-appropriated funds were exhausted, we encourage prospective borrowers to work quickly with an approved lender to complete and submit their applications. Approved applications are funded on a first-come, first-served basis. Borrowers should nonetheless immediately check with their lenders on the status of their pending application and, if no application has been submitted, submit their application when the lenders’ application portal reopens (which may be before Monday).

Since the PPP Loan Program initially launched, the United States Treasury (the “Treasury”) and the SBA have released guidance on an ongoing basis. Recently, the SBA Administrator has emphasized that borrowers must certify that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers are reminded that they must make this certification in good faith, taking into account their current business activity and ability to access other sources of capital or liquidity.

The SBA Administrator released additional guidance on April 24, 2020 for existing PPP borrowers and applicants concerning the above certification. If a borrower believes it is now unable to make this certification or otherwise comply with Treasury and SBA guidance, it may repay PPP funds to its lender on or before May 7, 2020, and the SBA will deem the borrower to have made the required certification in good faith.


Visit Wiggin and Dana’s COVID-19 Resource Center here for additional publications and helpful links on multi-disciplinary topics that are relevant during the current COVID-19 global pandemic.   

© 1998-2021 Wiggin and Dana LLPNational Law Review, Volume X, Number 115



About this Author

Christian Chandler Employment lawyer Wiggin Dana

Christian is a Partner in the firm’s Labor, Employment and Benefits Department in the Washington, DC office. He has over 20 years of experience in executive compensation and employee benefits matters. His significant experience in this area has made him a valued resource for a range of clients across industries, including public and private companies, senior executives, management teams and boards of directors.

Christian's practice spans the full spectrum of compensation and benefits issues, including the design, implementation, and regulatory compliance of employment agreements,...

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James Greifzu Corporate Securities Lawyer Wiggin Dana

James serves as Counsel in Wiggin and Dana’s Stamford office where he represents corporate and individual clients in connection with mergers, acquisitions, divestitures, commercial agreements, and other complex corporate transactions and related corporate governance matters. He advises clients across multiple industries, including manufacturing, retail, pharmaceutical, biotech, medical cannabis, and several services sectors.

James has experience representing acquirers, issuers, and financial advisors in private and public offerings of equity securities in...

Scott D. McClure Corporate Wiggin and Dana Washington, DC

Scott D. McClure is a Partner in Wiggin and Dana’s Corporate Department in the Washington, DC office. He brings to the table his expertise of nearly 30 years in Corporate Law. He started as an associate with a large, international firm in their Corporate Practice Group (Tax) division and worked his way up to being partner of the firm’s Corporate Practice Group Tax Division in which he led out the structuring of multiple taxable, tax-free domestic and cross-border reorganizations as well as stock and asset acquisitions.

Scott’s practice involves providing analysis of numerous...

Joshua Kutticherry Corporate Attorney Wiggin and Dana New York, NY

Joshua Kutticherry is an Associate in Wiggin and Dana’s Corporate department in the firm’s New York office.

Prior to joining Wiggin and Dana, Joshua worked as an Associate for an international law firm and a boutique law firm, both in New York. Most recently, Joshua worked as Counsel for a New York-based law firm, where he advised emerging companies, founders and investors; drafted and assisted clients in managing equity incentive plans and grants; provided strategic advice regarding legal implications of business decisions; and attended to clients’ general legal, compliance,...