On April 23, 2020, the U.S. House of Representatives approved the Paycheck Protection Program and Health Care Enhancement Act (H.R. 266). The U.S. Senate had previously approved H.R. 266 on April 21, 2020, and it is expected to soon be signed into law by the president. H.R. 266 is an extension of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law on March 27, 2020, which established the Paycheck Protection Program (PPP), a loan program that made $349 billion available to small businesses using the Small Business Administration’s (SBA) existing 7(a) loan program. Applications for PPP loans became available on April 3, 2020, but the program ran out of funding in 13 days.
H.R. 266 expands the PPP and Economic Injury Disaster Loan (EIDL) programs and provides additional funding for healthcare providers and testing capabilities. This bill provides for an additional $310 billion for PPP loans. Of the additional amounts available for PPP loans, $60 billion will be set aside for small lenders (split between lenders with less than $10 billion of assets and those with between $10 billion and $50 billion of assets). The bill also includes an additional $50 billion for EIDLs and $10 billion for emergency EIDL grants. H.R. 266 provides for $75 billion for reimbursements to hospitals and healthcare providers to support COVID-19–related expenses and lost revenue and $25 billion for a “Public Health and Social Services Emergency Fund,” intended to be used for the researching, developing, validating, manufacturing, and administering of COVID-19 tests. This $25 billion includes:
- $11 billion for states, localities, territories, tribes, tribal organizations, urban Indian health organizations, or health service providers to tribes;
- $1.8 billion for the National Institutes of Health;
- $1 billion for the Centers for Disease Control and Prevention;
- $1 billion for the Biomedical Advanced Research and Development Authority; and
- $600 million for the Health Resources and Services Administration.
H.R. 266 thus increases the total authorized funding for the PPP program from $349 billion to $659 billion, while also adding $50 billion to the EIDL program and increasing the total authorized funding for the EIDL emergency grant program from $10 billion to $20 billion. Once signed into law, we expect the SBA to recommence accepting PPP applications, possibly as early as Friday, April 24, 2020.