On April 21, 2020, the Senate passed a $484 Billion relief package (the Paycheck Protection Program and Health Care Enhancement Act; the “Act”). The House is expected to pass the Act on Thursday. The President has indicated he will sign the Act.
The Act provides for $310 billion to replenish the Paycheck Protection Program, which was created by the last stimulus law (Coronavirus Aid, Relief, and Economic Security Act; the “CARES Act”) and offers guarantees for forgivable loans to small businesses if a majority of the money is used to retain employees. About $60 Billion of that additional funding would be set aside for “underbanked” businesses, i.e., businesses in rural and minority areas that were having trouble accessing Paycheck Protection Loans.
The package also includes $60 Billion in funding for the Small Business Administration’s Economic Injury Disaster Loan program, $75 Billion for hospitals, and $25 Billion for coronavirus testing.
However, there are already signs that the $310 billion set aside for the Paycheck Protection Program might not be enough to meet surging demand for the loans, according to the Washington Post. Some banks have told customers that there might not be enough capacity in the program to fund all loan requests.
