Congress Passes New Stimulus Bill Including Round Two of PPP Funding

Blog
December 23, 2020

Included in the $900 billion COVID-19 relief bill approved by Congress on Monday is an additional $325 billion for small businesses, including $284 billion for the Payroll Protection Program and $20 billion for Economic Injury Disaster Loans (EIDL). The President has raised several concerns about the current bill and has not yet signed it.

If approved, the second round of PPP loans will be capped at $2 million, based on 2.5 months of average monthly payroll (3.5 months for hotels and restaurants with a NAICS code starting with 72), and available to borrows who meet the following requirements

  • Have 300 or fewer employees.
  • Have used or will use the full amount of their first PPP loan.
  • Can show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.

501(c)(6) not-for-profit organizations are now eligible to receive PPP loans which certain eligibility limitations on lobbying related receipts and expenditures. Previous PPP recipients may also apply for an additional loan if all the above-listed requirements are met.

Similar to the first round of PPP, qualifying costs must be incurred for the loan to be forgiven. Qualified costs under the new program include payroll, rent/mortgage interest, and utilities, along with newly eligible costs such as personal protective equipment.

The SBA is required to create a simplified forgiveness application for PPP loans of $150,000 or less, and EIDL advances are no longer deducted when determining PPP loan forgiveness.

The bill also extends Section 3610 of the CARES Act from September 30, 2020, to March 31, 2021, which gave federal agencies the authority to reimburse federal contractors for costs associated with granting leave to employees who were temporarily unable to work due to facility closures.