New Assistance for Small Businesses
On April 24, the Paycheck Protection Program and Health Care Enhancement Act (H. R. 266) was finalized to provide $484 billion of aid for small businesses and healthcare providers. This includes $370 billion in additional assistance for small businesses under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program, including emergency grants.
The initial funds appropriated by the original PPP in forgivable (if the borrower maintains employment and compensation levels) loans to qualifying small businesses affected by COVID-19, to cover payroll, rent, utilities and other costs were exhausted on April 16. Now additional help is available with the passing of the Enhancement Act.
According to Andrew Finkle, partner, Tax and Business Services at Marcum Accountants and Advisors, the Enhancement Act provides an additional $321 billion to the PPP, with other enhancements as follows:
• $310 billion for PPP loans, including $60 billion to smaller community lenders to ensure that more PPP loans are issued to small businesses, many of which were shut out during the first round of funding; plus
- $30 billion is set aside for banks and credit unions, including minority depository institutions (MDIs), which have between $10 billion and $50 billion in assets and are PPP lenders.
- $30 billion is set aside for banks and credit unions with less than $10 billion in assets, as well as all MDIs, Community Development Financial Institutions (CDFIs), certified development companies (CDCs) and microlenders that are PPP lenders.