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Financial Support for Medtech Companies
The Families First Coronavirus Response Act (FFCRA) provides refundable tax credits that reimburse small businesses for the cost of providing paid sick and family leave wages to employees for leave related to COVID-19. See IRS FAQ for Small and Midsize Businesses for details.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) contains $376 billion in support for small businesses and establishes new temporary funding programs under the Small Business Administration (SBA), including the Paycheck Protection Program and advances on Economic Injury Disaster Loans.
On April 9, the Treasury announced the Main Street Lending Program, which will provide up to $600 billion in new funding for small and mid-sized businesses with up to 10,000 employees or $2.5 billion in 2019 annual revenues.
The National Institutes of Health (NIH) posts information for applicants and recipients of NIH funding during COVID-19, including specific COVID-19 funding opportunities.
Paycheck Protection Program
For the latest information and updates on the Paycheck Protection Program (PPP), please visit the Treasury Department’s CARES Act for Small Business Page
June 29, 2020 | Summary of PPP Lending as of 6/27/20 (Released 6/29/20)
June 1, 2020 | Summary Report of PPP Lending (as of May 30, 2020)
May 15, 2020 | SBA and Treasury Release Paycheck Protection Program Loan Forgiveness Application
May 6, 2020 | SBA posts PPP Round 2 data (updated daily)
May 3, 2020 | Treasury releases additional information and guidance on PPP, including initial guidance on loan forgiveness:
- PPP Loan Report—Round 2
- Frequently Asked Questions (Questions 40-42)
April 28, 2020 | SBA and Treasury have released additional guidance regarding the Paycheck Protection Program:
- Joint Statement by Secretary Steven T. Mnuchin and Administrator Jovita Carranza on the Review Procedure for Paycheck Protection Program Loans
- Interim Final Rule on Seasonal Employees
- Interim Final Rule on Disbursements
- Frequently Asked Questions (Question 37)
- How to calculate PPP loan amounts
April 24, 2020 | Congress passes the Paycheck Protection Program and Health Care Enhancement Act, which will provide additional relief for smaller medical technology companies and a significant boost to the nation’s testing capabilities.
April 24, 2020 | Treasury issues additional guidance for PPP in Interim Final Rule on Requirements for Promissory Notes, Authorizations, Affiliation, and Eligibility that provides clarifications eligibility for private equity firms and portfolio companies.
April 24, 2020 | SBA issues expanded FAQs for PPP that addresses eligibility for “businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations.”
April 17, 2020 | SBA releases PPP Report – Approvals through 4/16/20
As part of the CARES Act, the Keeping American Workers Employed and Paid Act authorizes $349 billion in forgivable loans for small businesses to keep their workforces employed. Through a new Paycheck Protection Program the SBA will utilize an expanded 7(a) program to offer forgivable loans for 8 weeks of payroll and expenses.
Any business, sole proprietorships, self-employed individuals and independent contractors with fewer than 500 employees can apply. For details on SBA size standards see Applicable Affiliation Rules for the PPP, which is guidance issued by Treasury on April 3 that clarifies SBA’s affiliation rules and establishes a minority ownership test for affiliation.
Loans amounts are capped at $10 million and can be for up to two months of average monthly payroll costs from the last year plus an additional 25% of that amount. Loans will be forgiven if the proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8-week period after the loan is made, and employee and compensation levels are maintained. The loan has a maturity of 2 years plus an interest rate of 1%. There are no personal guarantees and no fees for small businesses.
Starting April 3, small businesses and sole proprietorships can apply for loans through any existing SBA 7(a) lender, and additional lenders are being enrolled in the program. As of April 9, non-bank lenders, such as financial technology firms, can apply to SBA for approval and begin processing PPP applications upon approval. PPP will be available through June 30, 2020, and is on a first-come, first-served basis. It is recommended that companies apply as early as possible.
For application forms, a lender search tool, FAQs, guidance documents, and rules on the Paycheck Protection Program visit:
EIDL Loan Advance
Small business owners in all U.S. states, Washington D.C. and territories are eligible to apply for an Economic Injury Disaster Loan (EIDL) advance of up to $10,000. The loans do not have to be repaid, and the funds will be made available within days of a successful application.
SBA Express Bridge Loans
Small businesses that already have a relationship with an SBA Express Lender to access up to $25,000 quickly, which can be used to bridge the gap while applying for an EIDL.
Main Street Lending Program
On April 9, the Treasury announced the Main Street Lending Program, which will provide up to $600 billion in new funding for businesses with up to 10,000 employees or $2.5 billion in 2019 annual revenues. Treasury will use funding established in the CARES Act to provide $75 billion in equity to the Main Street Lending Program, which is one of several Federal Reserve actions to provide $2.3 trillion in loans to households, employers, and state and local governments.
The Main Street Lending Program will facilitate credit flow for small and mid-sized businesses that were in good financial standing before the crisis by offering 4-year loans with principal and interest payments deferred for one year. Eligible banks may originate either a new loan under the Main Street New Loan Facility (Term Sheet) or increase the size of existing loans under the Main Street Expanded Loan Facility (Term Sheet). Firms seeking Main Street loans must commit to making reasonable efforts to maintain payroll and retain workers, and must also follow compensation, stock repurchase, and dividend restrictions that apply to direct loan programs under the CARES Act. Firms that have taken advantage of the PPP may also take out Main Street loans. See the above links to term sheets for more information, including fees, loan participation, and required attestations.
National Institutes of Health COVID-19 Funding Opportunities
The NIH has launched a new initiative aimed at speeding innovation, development and commercialization of COVID-19 testing technologies. With a $1.5 billion investment from federal stimulus funding, the Rapid Acceleration of Diagnostics (RADx) initiative will invest in early innovative technologies to speed development of rapid and widely accessible COVID-19 testing. RADx will expand the Point-of-Care Technologies Research Network (POCTRN) and use flexible, rapid processes to infuse funding and enhance technology designs at key stages of development. To learn more, click here.
The NIH is devoting significant resources to COVID-19, and has received emergency funding for COVID-19-related activities in two supplemental bills that together provide:
- $1.532 billion for NIAID
- $103.4 million for NHLBI
- $60 million for NIBIB
- $36 million for NCATS
- $30 million for the NIH Office of Director
- $10 million for NIEHS
- $10 million for NLM
NIH Grants and Funding posts a list of Funding Opportunities Specific to COVID-19. And the NIH Extramural Research “Open Mike” Blog has helpful information for applicants.
Financial Support Advocacy
- April 3, 2020 | AdvaMed Letter: Clarification of Eligibility for Small Businesses with Equity Investors under the SBA’s 7(a) Loan Program within the CARES Act
- *March 29, 2020 | Coalition Letter: Clarification of Eligibility for Small Businesses with Equity Investors under the SBA’s 7(a) Loan Program within the CARES Act
Additional COVID-19 Financial Support Resources and Webinars
- *April 9, 2020 | AdvaMed Accel Webinar: Paycheck Protection Program | Access presentation materials
- *March 30, 2020 | AdvaMed Accel Webinar: “Small Business Assistance during COVID-19” | Access presentation materials
AdvaMed Staff Contact: Patrick Brennan