Have you heard?
To start the new year another round of stimulus was signed into law, including $285 billion in new funds for the Paycheck Protection Program (PPP). The PPP is a part of the CARES ACT and is funded under the Small Business Administration (SBA). Its main goal was to help cover a business’s payroll and other costs to help them remain operational and allow their employees to pay their bills.
The SBA has not yet issued the regulations for the second round of PPP. However, they are expected to within 10 calendar days after the law has been passed. You will also hear the 2nd round of PPP referred to as Second Draw.
The new relief package includes:
- Additional funding for new PPP loans
- The ability to obtain a second PPP loan for small businesses facing significant revenue declines in any 2020 quarter compared to the same quarter in 2019
- Clarifications providing for the deductibility of business expenses paid with forgiven PPP loans (a material change from existing IRS guidance)
- Eligibility for Section 501(c)(6) not-for-profit organizations for the first time
- Eligibility for live venues, independent movie theaters, and cultural institutions
- $20 million for the Economic Injury Disaster Loan Programs
- Borrowers now have the option to choose between an 8-week covered period and a 24-week covered period.
Make sure to be in contact with your SBA lender so you are in the loop about any new developments! As we learned from Round 1, what is outlined in legislation does not always mirror what ends up in the rulemaking.
Resources used: National Law Review JDSUPRA