Last week, the Senate passed a $484 billion bill to provide the next round of aid to small businesses and hospitals as part of the government’s continuous efforts to dampen the economic impact of the ongoing COVID-19 pandemic.
Dubbed an ‘interim emergency bill,’ the legislative package includes $310 billion to replenish the Paycheck Protection Program (“PPP”) after the $350 billion initially allocated ran dry last week. The Small Business Administration (“SBA”), the government agency overseeing the loan program, has made it clear that it is working to prioritize small business applicants without access to other sources of capital. The program received early criticism that publicly traded companies such as Shake Shack and Ruth’s Hospitality Group received PPP loans designed for struggling small businesses.
According to the SBA, lender enrollment and new loan applications aren’t yet being accepted at this time, but small businesses are encouraged to collect all required documentation for the program and send it to their bank lender so that they can be ready to submit the application as soon as the program opens again. Importantly, those that applied in the initial wave of the PPP but did not get approved do not need to resubmit paperwork for the second round. Just as with the first wave of funding, business owners who maintain employee head-count and use the money within 8 weeks will have the loans forgiven.
In addition to replenishing the PPP, the bill dedicates $75 billion for hospitals to cover the cost of treatment for coronavirus patients and lost revenue from canceled elective procedures. The bill also includes a separate $25 billion specifically for COVID-19 testing, of which states will receive $11 billion to administer tests, with the CDC receiving an additional $1 billion towards surveillance measures such as contact tracing, where public health officials and digital tools will help to ‘trace’ the movements of an infected individual to notify contacts of potential exposure.
While the additional $75 billion does not appear to add new provider requirements or further specify how the money should be distributed, observers will continue to monitor discussions on Capitol Hill for the next tranche of funding, as an estimate from the Kaiser Family Foundation said that covering uninsured COVID-19 treatment costs could range from nearly $14 billion to as much as $41 billion.