In response to the Paycheck Protection Program running out of funding earlier this month, the Paycheck Protection Program and Health Care Enhancement Act was signed into law today. To increase amounts authorized and appropriated for the Paycheck Protection Program; economic injury disaster loans (EIDLs); emergency grants; and further funding for hospitals, providers, and testing, the Enhancement Act adds approximately $484 billion to COVID-19 relief.
Specifically with respect to the Paycheck Protection Program, the initial $349 billion set aside for small business loans has been increased to $659 billion. The eligibility and affiliation rules and the calculation of the maximum loan amount promulgated under the CARES Act and its subsequent guidance remain unchanged. The Enhancement Act also doubles the funds available to borrowers through emergency EIDL grants from $10 billion to $20 billion and provides an additional $50 billion for EIDLs.
New under the Enhancement Act is the requirement that funds are set aside for smaller and minority-owned insured depository institutions, credit unions, and community development financial institutions to ensure that businesses have access to loans from lenders of all sizes. Specifically, not less than $30 billion of the newly deployed funds are to be used for loans made by insured depository institutions and credit unions with between $10 billion and $50 billion in consolidated assets. An additional $30 billion has been set aside to ensure loans are made by a combination of community financial institutions, insured depository institutions, and credit unions with less than $10 billion in consolidated assets.
If you have any questions regarding the content of this alert, please contact Roger Cominsky, Financial Institutions & Lending Practice Area chair, at rcominsky@barclaydamon.com ; Danielle Katz, associate, at dkatz@barclaydamon.com ; or another member of the firm’s Financial Institutions & Lending Practice Area.
We also have a specific team of Barclay Damon attorneys who are actively working on assessing regulatory, legislative, and other governmental updates related to COVID-19 and who are prepared to assist clients. You can reach our COVID-19 Response Team at COVID-19ResponseTeam@barclaydamon.com.