Enhancement Act: Expanding Access to Business Loans during COVID-19 Crisis

If you keep up with the news or are subscribed to our newsletter, you may have already read that last week, President Trump signed the Payment Protection Program and Health Care Enhancement Act. This extends the availability of the several Small Bussiness Administration (SBA) loan programs originally contained in the CARES Act. The CARES Act provided various options for small and midsize businesses facing liquidity challenges from the coronavirus crisis, but funds for these loans were quickly exhausted in less than two weeks. 


This newly signed Enhancement Act, including small business stimulus and healthcare assistance, totals approximately $484 billion. It provides for a variety of federal assistance for hospitals, other health care entities, and national testing. It also provides an additional $310 billion in loans through the Paycheck Protection Program, as well as smaller dollar amount loans available under other SBA Loan Programs. 


What does this mean for the Paycheck Protection Program? 

During the time that the first round of allocated money was quickly depleted, small businesses ran into issues when applying for loans because they did not have existing credit relationships with larger financial institutions. In effect, the PPP funds have been increased by $310 billion and include several new tranches of loan funds. 


What does this mean for the Economic Injury Disaster Loan Assistance? 

The SBA’s Economic Injury Disaster Loan (EIDL) program has been increased by an additional $10 billion for grants under the program and an additional $50 billion for loans. Loans under this program are available to borrowers that can show they are unable to meet their existing financial obligations as a result of the COVID-19 crisis. 


What are Health Care Emergency Funds?

The Enhancement Act also appropriates $75 billion to prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for healthcare-related expenses or lost revenues attributable to coronavirus. It also appropriates $25 billion for COVID-19 testing. 


It is important to note that neither structures of the PPP or the EIDL have changed under the Enhancement Act (except for the set-asides for smaller banks and credit unions). For more detailed information regarding PPP, EIDL, or Health Care Emergency Funds, read our most recent newsletter. We have also provided information regarding PPP loan forgiveness on our blog. 


We are an Orange County CPA firm based in Irvine that is committed to providing quality tax and accounting services along with sound financial direction to clients throughout Orange County, California. We offer business development consulting, audit, tax preparation, IRS Audit, retirement planning, business roundtables, estate planning, QuickBooks consulting, Interim Chief Financial Officers, and a full range of traditional public accounting services. If you would like to learn more about how we can help you and your business improve its accounting practices during this difficult time, reach out to our team. For more information on other accounting topics, check out our blog.