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How Can the Latest COVID-19 Relief Package Help Your Small Business?

On April 23rd Congress passed another Coronavirus (COVID-19) relief package called the Paycheck Protection Program and Health Care Enhancement Act (“PPPHCE Act”).

The bill provides $484 billion in additional funding to replenish and supplement key programs under the CARES Act including:

  • Paycheck Protection Program (PPP) 
  • Small business disaster loans and grants (EIDL)

This additional funding will permit businesses that have not yet received PPP loans or EIDL grants or loans under the Coronavirus Aid, Recovery, and Economic Security Act (“CARES Act”) to receive needed funds, since those programs were quickly depleted only after two weeks.


The PPP Enhancement Act increases total funding for PPP loans from $349 billion to $659 billion, increases funding for EIDL grants from $10 billion to $20 billion,

it also provides an additional $50 billion of funding for economic injury disaster loans under section 7(b) of the Small Business Act so long as such funds are used “to prevent, prepare for, and respond to coronavirus, domestically or internationally.” However, this legislation does not define what it means for a company “to prevent, prepare for, and respond to coronavirus.

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New SBA Guidance for PPP Loans

The SBA has issued new application guidance that companies must complete to obtain a PPP loan.

Applicants are required to certify that “current economic uncertainty makes this loan request necessary to support the ongoing operations” of the applicant.

The SBA is advising applicants that before applying for a PPP loan to take into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to their business.

The guidance notes that public companies with substantial market value and access to capital markets probably could not make the certification in good faith, and that they should be prepared to demonstrate to the SBA the basis for such certification. However, any borrower that applied for a PPP loan prior to the issuance of the new guidance and repays the loan in full by May 7, 2020, will be deemed by the SBA to have made the required certification in good faith.

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Since the demand for the infusion of new money will likely continue and

since the COVID-19 legislation and guidelines are continuously changing, SBA loan applicants should continue to closely monitor developments.

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