A Look Into The Proposed Expansion To The Paycheck Protection Program

On Tuesday, April 21, 2020, the Senate passed the Paycheck Protection Program and Health Care Enhancement Act (also referred to as the ‘Phase 3.5’ relief bill) by voice vote which amends the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was signed into law on March 27, 2020.

The bill now goes to the House where a vote is expected Thursday, April 23, 2020.

‘Phase 3.5’ responds to the overwhelming demand by small businesses impacted by COVID-19 for the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) initially funded with $349 billion under the CARES Act, which was subsequently exhausted by April 16, 2020.

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Specifically, ‘Phase 3.5’:

  • Increases PPP funding by $310 billion
  • Increases EIDL emergency grant funding by $10 billion
  • Increases EIDL loan funding by $50 billion

Within the $310 billion of additional PPP funding, $60 billion is set aside for smaller lending facilities including community financial institutions, insured depository institutions, and credit unions with assets less than $10 billion. ‘Phase 3.5’ also includes a clarification that agricultural enterprises with 500 or fewer employees are eligible for EIDL emergency loans and grants.

So what does this proposed legislation mean for small businesses?

‘Phase 3.5’ does not appear to change the application process for PPP or EIDL. If you applied for PPP and/or EIDL prior to April 16, 2020, and your application was approved before funding ran out, you have an SBA assigned ‘E-Tran’ number. Your E-Tran number effectively holds your place in line to receive funding on a first-come, first-served basis.

  • PPP lenders who need assistance accessing the SBA E-Tran system can call the SBA Lender Customer Service Line at 1-833-572-0502.
  • EIDL applicants can review their application and track loan status online using the SBA Disaster Loan Assistance portal or by calling the SBA Disaster Assistance Customer Service Line at 1-800-659-2955.

– If you need a PPP loan but have NOT submitted an application, you should immediately contact your bank and accountant to start an application in earnest as this round of proposed funding may also run out quickly.

– If you applied for a PPP loan before April 16, 2020, but have yet to receive approval, you should immediately contact your bank to make sure your application was submitted or if it needs to be resubmitted.

– The SBA EIDL website currently reflects that the SBA is unable to accept new EIDL applications at this time, but that will hopefully change if ‘Phase 3.5’ is approved by the House and signed into law.

Our team will continue to stay on top of this. If you have questions please don’t hesitate to reach out.


Covid-19 Disclaimer: This article was released on April 22, 2020. Please be advised that any and all information shared in this article is subject to change. Given the extremely dynamic and rapidly evolving nature of COVID-19, the commentary shared in this video does not take into account any future information, studies, or updates on the impact of coronavirus.

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