Home Health & Hospice Week

You still have time to apply for Payment Protection Program COVID-19 relief funds, thanks to a new law.

In a surprise move, the Senate on June 30 and the House of Representatives on July 1 passed S. 4116. The unnamed law extends the PPP application window, which had closed June 30, to Aug. 8. President Trump signed it into law on July 4.

The move came after there was still $129 billion left in the PPP fund, and as coronavirus cases are spiking in many areas of the country.

“The Paycheck Protection Program resumed accepting applications July 6, 2020, at 9:00 AM EDT in response to [the] President signing the program’s extension legislation,” the Small Business Administration confirmed on its website.

“As the scope of the financial damage done to small businesses by the pandemic and resulting lockdowns has grown, it has become clear that longer-term support is necessary,” says Sen. Marco Rubio (R-FL), Chair of the Senate Committee on Small Business and Entrepreneurship, in a release.

“Small businesses still need our support to survive this hardship,” says Rep. Xochitl Torres Small (D-NM). “Small businesses will now have the opportunity to apply for relief funding through August 8,” Small says in a release.

Look At Who Has Received PPP Loans

“Other than extending the deadline for applying for a PPP loan, S. 4116 makes no statutory changes to the PPP or borrower eligibility,” point out attorneys D. Jeffrey Wagner and Stuart Schabes with Baker Donelson in online analysis.

Most home care providers that are interested in obtaining PPP loans have already filed applications, so the impact of the extension may be less significant than in other industries, expects finance expert Dave Macke with VonLehman & Co. in Fort Wright, Kentucky.

But the new law does give applicants that have been previously denied a chance to revise their applications and try again, note attorneys Eric Stevenson, Rachel Lilienthal Stark, and Dolores Kelley with Stark & Stark in online analysis.

So far, lenders have made almost 4.8 million PPP loans with an average loan size of about $108,000, Wagner and Schabes note. The Treasury Department and SBA released individual loan information after the extension was enacted.

The healthcare industry ranks second only to construction in PPP loan volume, says small business loan marketplace Lendio in analysis of the released loan information. “The healthcare industry has been hit especially hard by the coronavirus,” the company notes.

Organizations in the “Health Care and Social Assistance” sector “have received almost 500,000 loans totaling more than $67 billion, or about 13 percent of lent PPP funds,” says trade group LeadingAge.

Tip: Many lenders shut down application processes after the June 30 deadline passed, “in order to transition to forgiveness review,” Wagner and Schabes say. “Between lenders closing their application portals and the declining average loan size, borrowers may need to contact a couple of lenders to find one that is continuing to make PPP loans,” the attorneys advise.

Keep an eye out for even more changes to the program, counsels law firm Baker Botts in online analysis. Proposed Senate legislation would “further extend the program and ... provide for automatic forgiveness for PPP loans of $150,000 or less, which would save billions of dollars in costs in applying for forgiveness,” the firm says. “Congress is also considering legislation to redirect remaining funding to specific types of businesses and industries who have been hardest hit by the pandemic and with the greatest need, to allow borrowers to take additional loans and to expand their allowable uses of loan funds.”

Plus: “Given the spikes in coronavirus cases and the potential for additional government restrictions on businesses and business closures, additional stimulus will likely be considered by Congress when it returns from recess,” Baker Botts predicts.

“I will continue working with … colleagues to pass additional support for our smallest businesses, especially in our underserved communities, and provide long-term recovery resources for industries particularly hit hard by this crisis,” Rubio says in his release.

Note: The text of S. 4116 is at www.govtrack.us/congress/bills/116/s4116/text. The new loan information is at https://home.treasury.gov/policy-issues/cares-act/assistance-for-small-businesses/sba-paycheck-protection-program-loan-level-data.