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April 2020

President Trump Signs Paycheck Protection Program and Health Care Enhancement Act

Last updated April 24, 2020

President Trump today signed into law the Paycheck Protection Program and Health Care Enhancement Act (the “Act”). One of the primary goals of the Act is to provide additional funds for the Small Business Administration’s Paycheck Protection Program (“PPP”) and Economic Injury Disaster Loan program (“EIDL”).

The Act appropriates an additional $321 billion to the PPP, of which $310 billion is authorized for commitments for general SBA business loans under the PPP during the period beginning on February 15, 2020 and ending on June 30, 2020. The Act, while not materially altering the PPP, requires the SBA to set aside funds for lending by smaller financial institutions. Specifically, the SBA will be required to guarantee at least $30 billion in loans from insured depository institutions and credit unions with between $10 billion and $50 billion in consolidated assets. The SBA must also guarantee at least $30 billion in loans from community financial institutions, insured depository institutions with less than $10 billion in consolidated assets and credit unions with less than $10 billion in consolidated assets.

The Act also appropriates an additional $50 billion to fund direct loans from the SBA under the EIDL program for COVID-19 related disasters. In addition, the Act authorizes the SBA to disburse an additional $10 billion in EIDL advances. As discussed in our previous alert regarding the Coronavirus Aid, Relief and Economic Security Act, businesses can request an EIDL advance of up to $10,000. This advance does not need not be repaid if the business is not approved for an EIDL. However, if the business subsequently receives a PPP loan, the advance reduces the amount eligible for forgiveness under the PPP.

If you have any questions regarding these SBA loan programs, please contact your CSG advisor.

For additional information pertaining to the coronavirus outbreak, please visit CSG's COVID-19 Resource Center.


This publication contains general information on recent legal developments and is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Attorney Advertising. Prior results do not guarantee a similar outcome.

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