What is in the “Phase 3.5” relief bill?
This bill provides $484 billion worth in replenishment for the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), and Emergency Grants programs that were created when the CARES Act became law on March 27th. Since this is a bill designed to replenish programs already in place, it is being colloquially called “Phase 3.5.”
What’s the breakdown of funding for each program?
- PPP – Increase in authorization from $349 billion to $659 billion ($310 billion in additional funding).
- EIDL – Appropriates an additional $50 billion for the Disaster Loans Program Account.
- EIDL Grants – increase in authorization from $10 billion to $20 billion ($10 billion in additional funding).
Modifications to the PPP
Insured depository institutions, credit unions, and community development financial institutions (CDFIs) are eligible to become lenders for PPP loans. A CDFI is defined as either a minority depository institution, a certified development company, a microloan intermediary, or a state/federal credit union.
The bill’s language currently does not explicitly direct the Department of Treasury to modify their standards for approving new CDFIs as eligible lenders. Unless the Treasury changes their existing lender approval requirements, it will be difficult for a significant number of CDFI small business lenders to gain access to the program even if they are qualified.
- $30 billion is assigned to go towards loans made by insured depository institutions and credit unions that have assets between $10 billion and $50 billion.
- $30 billion is assigned to go towards loans made by CDFIs, small insured depository institutions, and credit unions with assets less than $10 billion.
Provisions for Department of Health and Human Services (HHS)
- $100 billion in new funding to HHS: $75 billion for the reimbursement of hospitals and health care providers and the remaining $25 billion for necessary expenses related to research and expansion of COVID-19 testing.
- The bill requires HHS to provide a strategic plan outlining how stateswill receive assistance to increase their testing capabilities.
- The bill also requires that states, localities, territories, and tribes applying for these resources have a deliberate plan in place for COVID-19 testing and mitigation policies.
Other provisions in this bill
- Agricultural enterprises with 500 employees or less are eligible to receive EIDL grants and loans.