On April 21, 2020, the U.S. Senate passed and approved what many are referring to as the “COVID-19 3.5” relief package. More formally known as the Paycheck Protection Program and Health Care Enhancement Act (“PPP & HCE Act”), this economic relief package is worth nearly $500 billion. The primary purpose of this package is to allocate more money to the Paycheck Protection Program, provide additional funding to hospitals and healthcare providers, and increase COVID-19 testing, especially in rural health clinics that have experienced a lack of testing capacity.
The proposed PPP & HCE Act authorizes the Small Business Association (“SBA”) to spend over $300 billion to help fund small business Paycheck Protection Program loans (“PPP loans”). This additional funding nearly doubles the original amount of funding that was allocated to provide economic relief to small businesses. In addition to helping replenish the PPP loan program, the proposed PPP & HCE Act seeks to provide $75 billion to support local hospitals and health care providers. This is good news for local hospitals and other health care providers who have suffered severe COVID-19 related expenses. As far as increasing the testing capacity for rural hospitals, the proposed PPP & HCE Act seeks to provide $25 billion to aid in the process of expanding COVID-19 testing to all individuals who need it.
If you are a small business owner, the fact that the Senate has passed and approved the PPP & HCE Act is good news. A significant number of small business owners who applied for a PPP loan did not have their application officially approved by the SBA before the program ran out of money last week. If you are a small business owner who applied but did not receive a PPP loan, it is important to call your bank to make sure that they still have all the financial documentation and information that they need in case the additional funding is ultimately approved. If you have not submitted a PPP loan application to your local bank, you should still consider it, especially in light of the PPP & HCE Act that will hopefully pass through the House this Thursday.