COVID-19: Increased Funds for Paycheck Protection Loans, Economic Damage Loans, and Emergency Grants | Miller Canfield
On April 23, 2020, Congress and President Donald Trump is expected to pass the “Paycheck Protection Program and Health Care Improvement Act” (Act) to increase funding for Paycheck Protection Program Loans (PPP loans) and EIDL emergency grants under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) and to provide $ 75 billion for hospitals and other eligible healthcare providers and $ 25 billion for COVID-19 testing.
The following is a summary of the changes to the features of the PPP Loan, EIDL and EIDL Emergency Grants of the CARES Act:
- An additional $ 310 billion for PPP loans
- An additional $ 50 billion for EIDLs
- Another $ 10 billion for EIDL emergency grants
Agricultural companies added as eligible entities for EIDL and EIDL emergency grants:
The act amends section 1110 (a) (2) of the CARES Act to add farms with no more than 500 employees as eligible entities for EIDLs and EIDL emergency grants. Agricultural companies are defined in Section 18 (b) of the Small Business Act as “companies engaged in the production of food and fiber, livestock and ranching, aquaculture and all other agricultural and agricultural industries”.
Fixed closures for insured depositaries, credit unions and community financial institutions:
The act further amends the CARES Act to require the Small Business Administration to provide loan guarantees for at least the following amounts to the following lenders:
- $ 30 billion to:
- Insured depositaries with consolidated assets ≥ $ 10 billion and
- Credit unions with consolidated assets ≥ $ 10 billion and
- $ 30 billion to:
- Community financial institutions;
- Insured depositaries with consolidated net worth
- Credit unions with
“Community Financial Institution” and “Credit Union” are defined as:
- Community financial institution means: (a) a Community Development Financial Institution within the meaning of Section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994, (b) a Minority depositary as defined in Section 308 of the Financial Institutions Reform, Reorganization and Enforcement Act 1989; (c) a Development company certified under Title V of the Small Business Investment Act 1958; and (d) an intermediary within the meaning of Section 7 (m) (11) of the Small Business Act; and
- Credit union means a state credit union or federal credit union within the meaning of Section 101 of the Federal Credit Union Act.