Apr 24 Alert: More Funding Added Under “CARES 2” for Businesses Impacted by COVID-19
The President signed the “Paycheck Protection Program and Health Care Enhancement Act” on April 24, 2020. The Act dubbed as “CARES 2” provides for additional funding to the tune of $484 billion broken out as such:
- Paycheck Protection Program (PPP) – $310 billion
- Economic Injury Disaster Loan (EIDL) Program – $60 billion
- Department of Health and Human Services (HHS) – $100 billion
Paycheck Protection Program (PPP)
The PPP was initially funded with $349 billion under the CARES Act and ran out of funds within days of the program opening. An additional $310 billion has been provided to replenish the funds under CARES 2 and includes:
- $30 billion set aside for banks and credit unions with assets between $10 billion and $50 billion and;
- $30 billion reserved for community banks, credit unions and “community financial institutions” with assets of less than $10 billion.
Economic Injury Disaster Loan Program (EIDL)
Of the additional $60 billion being provided for EIDL, $10 billion is reserved for the EIDL Advance Program that provides for a $1,000 grant per employee up to a maximum of $10,000. This grant does not have to be repaid by businesses impacted by COVID-19.
Health and Human Services (HHS)
$75 billion of additional funds has been allocated to the Public Health and Social Services Emergency Fund which will be distributed to hospitals and health care providers for related expenses or lost revenue attributable to the coronavirus. The remaining $25 billion will be used to research, develop, validate, manufacture, purchase, administer, and expand capacity for COVID‐19 tests.
Some other provisions, like additional funding for state and local governments and the repeal of the limitation on state and local tax deduction did not make it to the final bill.
Sax will continue to update you as further details are made available. Reach out to your Sax advisor or email [email protected] with questions. For more and on-going information relative to your state and business, visit Sax’s COVID-19 Resource Center.