Congress Passes Agreement to Add PPP Funding

Paycheck Protection Program Increase Act of 2020 Overview

Paycheck Protection Program Increase Act of 2020 Bill Text

An agreement has been reached to pass legislation to add money into the Paycheck Protection Program (PPP), a small-business loan program established by the Coronavirus Aid, Relief and Economic Security (CARES) Act. The agreement passed the U.S. House on April 23, following the Senate’s approval on April 21. President Donald J. Trump (R) signed the bill into law on April 24.

The Paycheck Protection Program Increase Act of 2020 is a $482-billion aid package that would replenish the popular small-business loan program while also providing funding for hospitals facing financial shortfalls due to COVID-19. The legislation includes $310 billion to restart the Small Business Administration’s (SBA) PPP, which has run out of money amid higher-than-expected demand for the forgivable loans designed to keep workers on the payroll while businesses are closed due to the pandemic. An extra $10 billion is included for administrative costs, such as fees paid to lenders participating in the program.

A total of $60 billion of the PPP funding would be set aside specifically for smaller lenders and those serving communities where relationships with more established financial institutions that dominate the SBA program are scarce. That pot of money for “underbanked” communities will be divided in half between lenders with less than $10 billion in assets and those with between $10 billion and $50 billion in assets.

The new loan program funds could run out nearly as fast as the previously approved funding, which lasted about 14 days. That likely will put a timer on Congress’ efforts to negotiate a larger, more sweeping aid package that Republicans, Democrats and the Trump administration all agree is needed.

This bill would provide $50 billion more for emergency disaster loans, another popular program that businesses are using to try to stay financially solvent as they remain closed to reduce the spread of the virus. There also will be $10 billion for grants of up to $10,000 each that disaster loan recipients can obtain, and $2.1 billion for the administrative costs of running that program. Hospitals and other healthcare facilities will receive $75 billion to help treat patients with the virus and address funding shortfalls they are facing as a result of the pandemic.

The number represents a compromise between Democrats, who pushed for $100 billion, and Republicans, who wanted to wait until a later package to provide any funding on top of the $100 billion in the roughly $2-trillion package that Congress approved last month. The money will go into the Department of Health and Human Services’ (HHS) Public Health Social Services Emergency Fund.

Lawmakers included $25 billion for more COVID-19 tests as well as a national testing strategy, something Democrats and governors have been urging so state officials can begin to think about reopening their economies once cases begin to subside. The White House threw its support behind additional funding for states to conduct contract tracing, a process where health officials can track who a patient has interacted with so they can enter quarantine and get tested.

Legislators are calling the small-business and healthcare package an “interim” measure to serve as a bridge to a larger bill that could be considered next month. Additional items left out of the latest bill, like more funding for states and localities, could be included in the next round of aid.

TRSA is pushing to add the NAICS (North American Industry Classification System) Codes for Industrial Laundries, Linen Supply and Laundry Services for eligibility in the PPP if companies have more than 500 employees but no more than 500 in any one location in the next round of legislation. The next bill could also include another round of direct payments to households as well as an extension of new jobless benefits provided in the $2-trillion aid package enacted last month.