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Senate lawmakers agreed on April 21, 2020, to inject cash into the Paycheck Protection Program (PPP), a mechanism for offering forgivable loans to small businesses. Lawmakers also agreed to allocate more money for disaster loans, healthcare providers, and testing. These funds give businesses a second chance at relief from the economic damage caused by COVID-19. The House is expected to take up and pass the bill shortly, and the president has indicated he will sign it into law.

Titled the Paycheck Protection Program and Health Care Enhancement Act, the bill appropriates new money to several relief programs. The largest portion—about $310 billion—goes toward shoring up the PPP. The PPP offers forgivable loans to small businesses that agree to maintain their salaries, benefits, and workforces for eight weeks after receiving a loan. Though Congress originally dedicated $350 billion to the PPP, borrowers quickly exhausted those funds.

Lawmakers set aside some of the new money for small lenders. They earmarked $30 billion for certain lenders with assets between $10 billion and $50 billion, and another $30 billion for institutions with less than $10 billion in assets. These set-asides aim to shield smaller companies, which typically deal with community lenders, from competition with larger businesses. By setting the funds aside, lawmakers were likely reacting to recent criticism of several large companies that received loans in the initial round of funding.

In addition to funding the PPP, the bill also injects money into the Emergency Disaster Relief Loan (EIDL) program. That program offers advances and low-interest loans to businesses injured by disasters, including the COVID-19 pandemic. The bill provides another $10 billion in EIDL advances and another $50 billion in loans. It also clarifies that agricultural institutions are eligible for the EIDL program.

Next, the bill offers $75 billion in relief to healthcare providers, including hospitals, to compensate for costs associated with COVID-19. The bill allows healthcare providers to use these funds to replace lost revenue or cover new expenses, such as temporary structures, protective equipment, testing supplies, workforces, training, and surge capacity.

Finally, the bill allocates $25 billion for COVID-19 testing. It directs this money to agencies charged with developing and distributing tests, including the National Institute of Health and the Center for Disease Control.

The bill is also notable for its omissions. It includes no direct aid to state and local governments to cope with COVID-19-related costs. Congressional Democrats had sought to include that aid in this bill. Lawmakers remain divided over the aid, which is likely to become a point of contention in the debates over “Phase 4” COVID-19 relief legislation. That legislation is just now beginning to take shape.

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