Last week, the Small Business Administration stopped accepting applications for the Paycheck Protection Program and Economic Injury Disaster Loans after exhausting the initial $349 billion in funding provided by Congress for small businesses impacted by the COVID-19 pandemic.
Both the House and Senate have now overwhelmingly approved a Phase 3.5 Coronavirus Relief Package which provides an additional $484 billion in support mainly for small businesses and hospitals.
Here’s what we know about the provisions of this new funding package:
Small Business Provisions
Paycheck Protection Program (PPP): This section would increase funding for the PPP, which provides forgivable loans to small businesses, by a total of $321 billion. It would also set aside funds to be distributed by smaller financial institutions, including:
- $30 billion from banks, credit unions, and other financial institutions with assets between $10 billion & $50 billion
- $30 billion from banks, credit unions, and other financial institutions with less than $10 billion assets
Economic Injury Disaster Loans (EIDL): This section would provide a total of $60 billion in funding for the Small Business Administration’s EIDL program which provides direct, low-interest, long-term disaster loans, including:
- $50 billion that would be leveraged into more than $350 billion in loans for small businesses
- $10 billion for the EIDL grants program, which gives small businesses access to quick capital infusions worth up to $10,000 each
Additionally, EIDL eligibility would be extended to agricultural enterprises with 500 or fewer employees.
Healthcare Provisions
Hospitals & Healthcare Providers: This section would provide $75 billion to reimburse hospitals and other healthcare providers amid the coronavirus (COVID-19) pandemic. Eligible entities include public entities, Medicare & Medicaid enrolled suppliers & providers, and other for-profit or not-for-profit entities that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. Funds from this section would be used to reimburse them for things such as:
- The treatment of uninsured patients diagnosed with COVID-19
- Expenses or lost revenues that are attributable to the coronavirus
- Building or constructing temporary structures, leasing properties, establishing emergency operation centers, retrofitting facilities, and building surge capacity
- Purchasing medical supplies & equipment, including personal protective equipment (PPE), and testing supplies
- Workforce increases and training for COVID-19
Testing & Tracing: This section would provide a total of $25 billion in funding for COVID-19 testing & tracing capacity. These resources would fund the manufacture, procurement, distribution, and administration of tests, such as rapid point-of-care tests; and support epidemiology efforts at academic, commercial, public health, and hospital laboratories to conduct surveillance & contact tracing.
Of the total, $11 billion would be set aside for state & local governments for purchasing, administering, processing, and analyzing COVID-19 tests, in addition to supporting COVID-19 surveillance & tracing activities.
Next Steps
The Phase 3.5 Relief Package is expected to be signed by President Trump today. It’s widely expected that the application requirements and process for PPP and EIDL funding will be substantially similar if not the same as the first round of funding. We encourage our small business clients to proactively reach out to their banking representatives now and daily. At minimum, we recommend that you make proactive and continuous contact with your banking representative to stay informed of your bank’s rollout of the Phase 3.5 application process as soon as it goes live. This may be a case of the squeaky wheels getting the grease first, and it’s quite likely there will be a mad rush to apply. Funds are limited, so a sense of urgency is essential to increasing the likelihood of receiving funding support.
Please do not hesitate to reach out to us if you have specific questions or concerns about the stimulus package for small businesses or any other aspect of the government stimulus.
For additional support on this topic, we have included previously provided links to supporting tools and resources below. Please note there may be some changes to these documents as a result of the Phase 3.5 rollout (not yet known). Again, it’s highly recommended that you maintain proactive contact with your small business bank now and daily.
Supporting tools and Resources:
We are here to support you through this very difficult time. Please do not hesitate to reach out to me or any member of my team with questions or just for reassurance.
Be Well,
