Paycheck Protection Program (PPP) Changes

The Paycheck Protection Program and Health Care Enhancement Act (“Enhancement Act”) was signed into law on April 24, 2020. As relevant, the Enhancement Act adds to and amends the Paycheck Protection Program (“PPP”) established by the Coronavirus Aid, Relief, and Economic Security Act. There are three primary additions and amendments to the PPP:

1. The Enhancement Act provides for an additional $310 billion of funding for the PPP.
2. The Enhancement Act sets aside $30 billion of the additional $310 billion of funding for loans made by: (1) insured depository institutions with consolidated assets of not less than $10 billion and not more than $50 billion; and (2) credit unions with consolidated assets of not less than $10 billion and not more than $50 billion.
3. The Enhancement Act also sets aside $30 billion of the additional $310 billion of funding for loans made by: (1) community financial institutions; (2) insured depository institutions with consolidated assets of less than $10 billion; and (3) credit unions with consolidated assets of less than $10 billion.

At this time, there is still no guidance on the tax implications of covered business expenses paid for by a forgiven PPP loan. However, continued guidance will likely be developed by the Department of Treasury and/or the Small Business Administration.

Disclaimer: This document is for informational purposes only. This document seeks to provide an overview of rapidly changing and nuanced topics relating to the 2020 Coronavirus Aid, Relief, and Economic Security Act and 2020 Paycheck Protection Program and Health Care Enhancement Act amongst other items and may not reflect current information. This document should not be construed as providing legal, tax, investment, financial, or any other advice. You should contact your attorney and/or financial advisor to obtain advice with respect to any legal and/or financial matter within this document.

Please contact James Bohm (jbohm@bohmwildish.com), Gilbert Partida (gpartida@bohmwildish.com), or John Murillo (jmurillo@bohmwildish.com) if you have any questions or concerns regarding the contents of this memorandum.

https://www.congress.gov/116/bills/hr266/BILLS-116hr266enr.pdf
https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf
https://www.congress.gov/116/bills/hr266/BILLS-116hr266enr.pdf
Id.; The following terms are defined in the Enhancement Act:
1. “Community financial institutions” is defined as:
a. A community development financial institution;
b. A minority depository institution, as defined in section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989;
c. A development company that is certified under title V of the Small Business Investment Act of 1958; and
d. An intermediary, as defined in section 7(m)(11).
2. “Credit union” is defined as:
a. “A State credit union or a Federal credit union, as those terms are defined, respectively, in section 101 of the Federal Credit Union Act.’’
Id.