On Tuesday, April 21, 2020, the U.S. Senate passed H.R. 266, the “Paycheck Protection Program and Health Care Enhancement Act” by voice vote. The bill appropriates an additional $310 billion for the Paycheck Protection Program (PPP), which exhausted its initial $349 billion in funding within two weeks of Congress’ passage of the CARES Act. The bill also provided $60 billion for community banks and smaller lenders, $75 billion for hospitals, $25 billion for testing, and $60 billion for emergency disaster loans and grants.
The U.S. House of Representatives is expected to take up the bill on Thursday morning, April 23, 2020, as House lawmakers are expected to return to Washington for a recorded vote on that date. The President is expected to sign the bill shortly thereafter, thereby releasing the funds for additional lending to small businesses across the country.
The Paycheck Protection Program provides loans to small businesses under 500 employees. The loan obligation is eligible for complete forgiveness if loan proceeds are spent to support payroll costs, rent, and other qualified expenses. The amount of loan forgiveness is also not included in the taxable income of the borrower.
If a business has applied for the loan and did not receive funding due to the exhaustion of the program, they should contact their lender immediately to confirm their loan application is still active and any other pertinent details to get their Paycheck Protection Loan back on track.
Michael D. Walker is a business, tax and estate planning attorney who has worked with individuals and small to medium-sized businesses for nearly 30 years. A careful listener, Michael skillfully guides his clients to meet the wide variety of legal challenges they face in our current complex world.