This $484 billion relief bill, officially known as the "Paycheck Protection Program and Health Care Enhancement Act" was signed into law by President Trump on April 24, 2020.

The legislation adds money to existing programs that have either run out of money or are considered underfunded. It increases funding for the Paycheck Protection Program, Economic Injury Disaster Loan (EIDL) program, including emergency grants, and includes new hospital and health care funding as well as additional testing.

How the Funds Break Down

The bill provides $370 billion in small business funding including $310 billion to the Paycheck Protection Program (PPP). Of the $310 billion, approximately $60 billion will go to small, medium, and community lenders with assets ranging from less than $10 billion up to $50 billion.

An additional $60 billion will be added to the Economic Injury Disaster Loan (EIDL) program which, like PPP, was depleted. Alongside all this is a $75 billion appropriation for hospitals and $25 billion for testing.

Most of the balance of about $14 billion goes toward administrative costs, making the package total $484 billion.

Key Takeaways

  • The new $484 billion bill serves as interim funding legislation as Congress begins discussions on Phase 4 of its COVID-19 stimulus and relief programs.
  • The lion's share of the money, $370 billion, goes to small businesses.
  • An important set-aside of $60 billion goes to small banks to help answer complaints that too much of original PPP funds went to large companies.
  • About $75 billion goes to hospitals and $25 billion to testing.

Paycheck Protection Program (PPP) New Funding

Approximately $310 billion will be used to refresh the Paycheck Protection Program, which offers forgivable government-backed private loans, provided companies retain their workforce.

PPP loans of up to $10 million to cover eight weeks of expenses do not have to be paid back if at least 75% of the money is spent on rehiring and keeping employees. Otherwise, the loan comes with a 1% interest rate and must be repaid within two years.

Small Lender Set-Aside

The PPP has been so popular it ran out of funds on April 16, 2020, prompting criticism over who did and did not receive forgivable loans. As a result, the new legislation includes a set-aside of at least $60 billion of the $370 billion for small lenders including community banks, credit unions, and community development financial institutions. This set-aside will be carved out of the $310 billion PPP allocation. 

The small lender set-aside contains no guidance for who gets the loans, only that small lenders get access to the funds.

Economic Injury Disaster Loan (EIDL) New Funding

Another $60 billion goes to the existing SBA Economic Injury Disaster Loan (EIDL) program, which offers loans of up to $2 million to companies with fewer than 500 employees. This money can be used to pay off debt, provide payroll, and pay other bills.

Up to $10,000 Forgiveable Loan Advances for EIDL

One of the main attractions of the EIDL program is the potential to receive an up-to-$10,000 ($1,000 per employee) advance on an EIDL loan within three days: $10 billion of the $60 billion authorization for EIDL will go toward these loan advances. 

Hospital Funding

The $75 billion allocated by the new legislation goes to the U.S. Department of Health and Human Services (HHS) to reimburse providers for the cost of treating COVID-19 patients. This includes funding to provide diagnosis, testing, and care of these individuals.

Testing

Finally, $25 billion has been authorized to help develop and implement a national plan to helps states with testing protocols. The funds are further broken down by various jurisdictions and groups including states, localities, tribes, the CDC, National Institutes of Health and others. Areas of concentration include not only testing and contact testing for COVID-19 in individuals but also testing for possible immunity.