Additional Relief: Paycheck Protection Program and Health Care Enhancement Act Signed into Law Today

By: Scott Emery | April 24, 2020


After passage on Thursday by the U.S. House of Representatives, today President Trump signed into law the “Paycheck Protection Program and Health Care Enhancement Act” (PPPHCE Act). This legislation provides for $484 billion of funding for the Paycheck Protection Program (PPP), for health care and enhanced COVID-19 testing, and for the Small Business Administration’s (SBA) disaster loan program and Emergency Economic Injury Disaster Loan grants. Of the $484 billion, the PPPHCE Act allocates an additional $310 billion of funding to the PPP for loans, which was originally established under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Due to the demand for PPP loans, it is expected that the extra $310 billion will be exhausted in a matter of days, much sooner than the thirteen days it took to deplete the original $349 billion of funding under the CARES Act. Therefore, eligible borrowers that held off applying for a PPP loan, or did not receive funding because the initial $349 billion of funding under the CARES Act was exhausted, should not delay and immediately contact an SBA lender concerning an application.

The PPPHCE Act provides set-asides for borrowers with lending relationships at financial institutions apart from the larger national banks. Of the $310 billion for PPP loans, the SBA will guarantee not less than $30 billion in loans made by small financial institutions (having consolidated assets of less than $10 billion) and not less than $30 billion in loans made by medium-size lenders (having consolidated assets between $10 billion and less than $50 billion).

Otherwise, the terms of PPP legislation under the CARES Act are still in place. Applications need to be made by June 30, 2020, and the loan amounts will be forgiven as long as:

  • the loan proceeds are used to cover payroll costs, utilities, certain mortgage interest, and rent expenses over the eight-week period after the loan is made; and,
  • employee and compensation levels are maintained.

Please note that the interim guidance clarifies that borrowers must spend at least 75% of their loans on payroll costs to qualify for loan forgiveness. On April 23, 2020, the U.S. Treasury Department published on its website updated FAQs concerning PPP loans.

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At Henson Efron, we are committed to helping our clients navigate these difficult and uncertain times, and our knowledgeable team of attorneys is ready to provide you with assistance and advise you of your rights and options. For more information, please call 612-339-2500 or send us an email.

The purpose of this article is merely to provide general information and should not be construed as legal advice.

Scott Emery
As a naturally curious person, I want to first understand the goals and concerns of my clients and their perspective of a matter. That way, I can deliver relevant information and provide legal counsel in a meaningful way. I bring a problem-solving orientation to advise clients on practical solutions to help them achieve their goals and resolve issues. I represent individuals and businesses across major...