Congress Increases Appropriations to CARES Act Programs
April 24, 2020
By: Dustin J. Miller, Rod Kubat
Funding for programs authorized under both the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act was quickly oversubscribed due to the overwhelming need created by the COVID-19 pandemic. In response, Congress passed the Paycheck Protection Program and Health Care Enhancement Act with additional $480 billion for Small Business Administration (SBA) programs and health care providers on April 23, 2020.
Paycheck Protection Program (PPP)
The new funding includes an additional $310 billion for the SBA’s PPP that already authorized $349 billion in less than three weeks. Out of that amount, $250 billion is unrestricted, while there is $60 billion set aside for PPP loans to be made by community banks, with $30 billion available for financial institutions with financial assets between $10 to $50 billion and another $30 billion available for financial institutions with assets less than $10 billion.
The new Act clarifies that agriculture enterprises are eligible for both of the PPP and EIDL SBA loan programs but did not include expansion of the PPP to other nonprofit organizations such as 501(c)4s and 501(c)6s.
If your PPP loan application was not approved in the initial funding round, we encourage you to contact a SBA approved lender quickly, as Secretary Mnuchin only anticipates this funding will last for a timeframe similar to the initial funding round-approximately 8 days. Please take a look at Nyemaster’s COVID-19 CARES Act page for additional guidance on the PPP.
Economic Injury Disaster Loan (EIDL) Program
The new Act authorized an additional $60 billion for the EIDL program, with $50 billion directed to loans and $10 billion directed for the loan advances that were authorized under the CARES Act. SBA closed this program due to the overwhelming response that far exceeded the available resources. Further information on the EIDL program can be found here, but based upon work with our clients and the SBA, we believe it is unlikely this new appropriation will be sufficient to match the current applications awaiting a response from the SBA.
Health Care Provider Funding
The CARES Act provided $100 billion for health care providers to address costs associated with the COVID-19 pandemic and offset revenue losses from the suspension of elective surgeries. This new relief package included an additional $75 billion for the Public Health and Social Services Emergency Fund for health care providers and $25 billion for COVID-19 testing. This Fund will be administered by the Department of Health and Human Services and there is currently limited guidance on the process for accessing these funds. Health care providers can find more specific information about this program here.
Please contact your Nyemaster Goode attorney for any questions regarding the CARES Act or any other economic assistance for your business in general.
Additional CARES Act Coverage:
- CARES ACT ESTABLISHES PAYCHECK PROTECTION PROGRAM
- HOW TO APPLY FOR A PAYCHECK PROTECTION PROGRAM LOAN
- 7 FAQS ON UPDATED GUIDANCE TO PAYCHECK PROTECTION PROGRAM
- PPP LOAN FORGIVENESS: AN OVERVIEW
- BEST PRACTICES TO MAXIMIZE PAYCHECK PROTECTION PROGRAM LOAN FORGIVENESS
- FED LAUNCHES MAIN STREET LENDING PROGRAMS FOR SMALL AND MID-SIZED BUSINESSES
- EXPANSION OF OTHER LOANS PROGRAMS
- NEW AND MODIFIED TAX PROGRAMS UNDER CARES ACT
- CARES ACT: EMPLOYEE BENEFIT PROVISIONS
- WHAT CARES ACT MEANS FOR HIGHER EDUCATION INSTITUTIONS
- CARES ACT PROVIDER RELIEF FUND
- ADDITIONAL DISTRIBUTION FROM CARES ACT PROVIDER RELIEF FUND
- CARES ACT: MORE THAN STIMULUS MONEY
- CARES ACT PROVIDES INCREASED OPPORTUNITIES FOR INDIVIDUALS TO DEDUCT CHARITABLE CONTRIBUTIONS
- MEDICARE ACCELERATED AND ADVANCE PAYMENT PROGRAM
- FEDERAL RELIEF FOR HEALTHCARE PROVIDERS