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Congress passes Paycheck Protection Program and Health Care Enhancement Act

Apr 24, 2020

On April 24, 2020, the President signed the Paycheck Protection Program and Health Care Enhancement Act into law.

The Act provides $310 billion in additional funding for the Paycheck Protection Program (PPP), $50 billion for the Disaster Loan program and $10 billion for the Emergency Disaster Loan grant, as well as funding for other critical needs dealing with the effects of COVID-19. SBA lenders are expected to have the ability to process and submit loan applications within the next few days.

Breaking down the Act

After the initial PPP funding was criticized for its subpar availability to rural and underserved areas, the additional PPP funding is being targeted toward different recipients by targeted allocation of funds to borrowers. Of the $310 billion, not less than $30 billion is targeted for financial institutions with between $10 billion and $50 billion in assets, and not less than $30 billion to financial institutions with under $10 billion in assets.

Farmers and ranchers were previously eligible for PPP loans but not EIDL. With this second round of funding, they are eligible EIDL borrowers.

Other notable funding under the Act includes:

  • $75 billion in grants and other mechanisms to eligible healthcare providers generally for unreimbursed costs incurred to deal with coronavirus-related issues. This program is administered by the Department of Health and Human Services.
  • $25 billion for manufacturing and purchasing tests, about half of which is to be administered at the state and local level.
  • $50 billion of funding for the SBA’s “Disaster Loans Program Account” for the cost of direct loans authorized by Section 7(b) of the Small Business Act.

Further guidance on good faith certification coming

This week, both Senator Rubio and U.S. Treasury Secretary Mnuchin indicated that the PPP’s good faith certification borrowers are asked to make in their application is real and enforceable. Part of the good faith certification proclaims that “uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient.”

Both of their comments were made after Shake Shack announced it was returning its $10 million PPP loan. Mnuchin has stated that the Treasury will issue “clear guidance” as to the meaning of that good faith certification, and that borrowers that do not meet the guidance can promptly return the loan proceeds.

Applying for the PPP or EIDL

The eligibility parameters for the PPP and EIDL have not changed from the initial round of funding. If you are eligible for either loan, we encourage you to apply as soon as possible. At the moment, many lenders are not taking applications due to an overflow from the first funding round. But with the passage of the Paycheck Protection Program and Health Care Enhancement Act and the refunding of the programs, this is likely to change.

If you need assistance applying for either loan, contact Wipfli.

For further resources to help your business navigate the impact of COVID-19, visit our COVID-19 resource center.


Richard J. Salter, CPA, JD, LL.M.
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