Insights and Analysis

REVISED (Update #3): COVID-19 U.S.: Navigating the Paycheck Protection Program (PPP)

15 April 2020

On Friday, March 27, President Trump signed into law H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to address the catastrophic impact of COVID-19 on the U.S. economy. The CARES Act is a US$2.2 trillion stimulus package, consisting of two sections. Division A contains a range of stimulus measures, including direct assistance to families and workers, expanded unemployment insurance, funding for hospitals and health care providers, financial assistance to small businesses, and loans and guarantees for other severely distressed sectors of the economy. Division B provides over US$339 billion in an emergency supplemental appropriations package, more than 80% of which is for state and local governments and communities.

Among the most consequential measures for many of our clients will be programs designed to bolster small businesses, including, and most notably, a significant expansion of the 7(a) Loan Guarantee Program facilitated by the Small Business Administration (SBA), as discussed in more detail in the link below.

SBA and the Treasury Department are expected to issue additional regulations governing or clarifying certain aspects of the expansion of the 7(a) Loan Guarantee Program from time to time. Hogan Lovells is monitoring this closely and will continue to publish updated guidance.