Additional PPP Money Approved
As a part of legislation passed by Congress in the final days of this legislative session - and signed into law by President Trump on Dec. 27th, additional funds were included for the Paycheck Protection Program (PPP), a small business stimulus program originally included in the CARES Act that passed Congress in March 2020. The CARES Act and a supplemental funding bill earlier in the year provided over $650 billion in funding for the PPP program. The most recent legislation provides approximately $300 billion to the Small Business Administration for PPP loans, bringing the total to almost $1 trillion in assistance to small businesses to fight the impact of the COVID-19 pandemic.
While regulatorily the initial PPP funds were made available not only to small businesses but to non-profit organizations and churches, specific legislative language has been included in the new legislation to assure that non-profit organizations are eligible for this second round of PPP funding.
Although the legislation including the new PPP money has passed, the regulations implementing such are in the drafting stages and have not been released as of yet. Based upon the legislation, we expect this round of funding to have different, and more stringent rules, than the first round, including the following:
Eligibility will be limited to small businesses with 300 or fewer employees
Applicants will have to prove they sustained a 25% revenue loss or greater in any quarter of 2020
Forgivable expenses are expanded beyond rent, mortgage principal payments, and utilities to also include supplier costs, investment in facility modifications, and personal protective equipment to operate safely
Loan forgiveness will be greatly simplified for PPP loans of $150,000 or less
Borrowers who meet the new criteria, but who received a PPP loan in the first round of funding, will be eligible to apply for a second PPP loan
Special set-asides will be available for business with less than 10 employees and located in underserved communities
As additional information is made available about this new round of funding under the PPP program, such will be provided.