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President Trump signed into law today the “Paycheck Protection Program and Health Care Enhancement Act,” a $484 billion coronavirus aid package that will add more than $300 billion to the Paycheck Protection Program (PPP) of the CARES Act, including $60 billion for loans to be made by small financial institutions such as banks and credit unions.
The PPP helps businesses with fewer than 500 employees obtain loans that can cover eight weeks of their payroll, benefits, and other expenses. The PPP funding had previously reached the $349 billion loan limit on April 16. The PPP was created as part of the more than $2.2 trillion stimulus package, known as the CARES Act, which passed last month.
In response to concerns that many large business enterprises have obtained loans under the PPP, new guidance has been released confirming that borrowers must certify, in good faith, an economic need for obtaining funding. The guidance is located in the United States Treasury’s latest update to its Frequently Asked Questions (FAQs) document on the PPP loans. The U.S. Senate Committee on Small Business and Entrepreneurship is expected to commence oversight of the program in the fall.
The Bill also includes $25 billion for expenses related to coronavirus testing, $75 billion for reimbursements to hospitals and health care providers, and $50 billion for the SBA’s Economic Injury Disaster Loan program.
Taylor Porter attorneys continue to closely monitor the developments of the SBA loan programs and the CARES Act. Visit the Taylor Porter Coronavirus - Legal News and Business Resources website for updated legislation, news, and legal developments pertaining to COVID-19.
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