Increased Funding for Small Business Relief

INCREASED FUNDING FOR SMALL BUSINESS RELIEF

On Friday, April 24, 2020, the Paycheck Protection Program and Health Care Enhancement Act (the “Act”) was signed into law. The Act was passed by the Senate on Tuesday, April, 21, 2020, and then passed the House of Representative on Thursday April 23, 2020. The primary purpose of the Act was to provide more funding for the Paycheck Protection Program and for Economic Injury Disaster Loans (“EIDL”), programs that were originally made available pursuant to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), to increase funding to health care providers, and to allocate money for testing related to COVID-19.

The Paycheck Protection Program, which was designed to provide small businesses with forgivable or partially forgivable loans to retain staff, was originally allocated $349 billion in the CARES Act. This allocation ran out quickly and left many eligible businesses unable to secure loans. The Act provides for an additional $310 billion in funding for the program.

The EIDL program in the CARES Act provided loans to eligible recipients and was designed to provide businesses with a quick influx of cash, by means of a $10,000 advance that would not need to be paid back. Despite the amount of the advance being capped at $10,000 (and linked to numbers of employees), the funding for the program still ran out quickly. The Act provides an additional combined $60 billion in funding for the grant and loans under this program.

In addition to the extension of these CARES Act programs, the Act also provided $75 billion in funding to eligible health care providers and $25 billion related to coronavirus testing. Additional guidance regarding the Act is expected this week.

If you have any questions about the Paycheck Protection Program or EIDL program, please contact McNeelyLaw’s attorneys by visiting www.mcneelylaw.com or calling our office at 317-825-5110.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.