954-613-8597

Stimulus Round Two: New Covid Relief Bill & PPP-2

Mon Dec 28, 2020 by on Coronavirus

COVID EMERGENCY RELIEF FRAMEWORK

The Consolidated Appropriations Act, 2021

On December 27, 2020 President Trump signed into law the COVID-19 $900 billion relief bill, the Consolidated Appropriations Act, 2021, that Congress passed on December 21,2020.

What does this new legislation do? This legislation adds $300.00 to extended weekly unemployment benefits and provides more than $300 billion in aid for small businesses. It also provides tax deductibility for business expenses paid with forgiven Paycheck Protection Program (PPP) loans, allows 501 (c) (6) not-for profits eligible for loans for the first time, and offers businesses with an opportunity to apply for a second PPP, or now known as PPP2 loan.

SBA PPP Payroll Protection Program

What, as of now, are the specifics? While the list below highlights key provisions of the new legislation, it is not an exhaustive list. 

  • Provides $350 billion for small businesses: $284 billion of which is going to the Small Business Association (SBA) for first and second PPP forgivable small business loans; $20 billion to provide Economic Injury Disaster Loan (EIDL) grants to businesses in low-income communities; $15 billion to cultural institutions and independent movie theaters; and $12 billion to help low-income and minority communities.
  • $120 billion to provide the unemployed with $300 per week supplements from Dec. 26, 2020 until March 14, 2021. The bill also extends Pandemic Unemployment Assistance to, amongst others, the self-employed and gig workers.
  • $25 billion in emergency rental aid and an extension of the national eviction moratorium until January 31, 2021.
  • $45 billion for transportation, including $16 billion for airlines, $14 billion for mass transit; $10 billion for state highways; $1 billion for Amtrak; and $ 2 billion for intercity buses as well as for airports.

PPP Loan Forgiveness

What about the PPP and loan forgiveness?

  • The new legislation creates a simplified forgiveness application for loans of $150,000.00 or less. Depending upon your bank, the borrower shall receive forgiveness if a borrower signs and submits to the lender a one-page certification, indicating the number of employees retained because of the loan, the estimated total amount spent on payroll costs and other expenses such as rent, and the total loan amount. The SBA is required to create the simplified forgiveness application within 24 days of the bill’s enactment. Borrowers are still required to retain records related to employment for four years and other records related to the PPP for three years in case the SBA audits the loan.
  • Removes the requirement that PPP borrowers have to deduct the amount of any EIDL advance from their PPP forgiveness amount.
  • Specifies that business expenses paid with forgiven PPP loans are tax deductible. This is a substantial change as the issue of deductibility was unsettled until now.

What about further PPP loans for small business?

The PPP2 loans will be available to first time qualified borrowers as well as businesses that previously received a PPP loan.

For a business that has already received PPP funding, recipients may apply for another loan up to $2 million if:

  • They have 300 or fewer employers
  • Have used all or will have used the full amount of their first PPP loan
  • Show a 25% gross revenue decline in any quarter in 2020 as compared with the same quarter in 2019

For a business that has not applied for PPP funding, the PPP2 will allow for funding for:

  • Businesses with 300 or fewer employees eligible for other SBA 7 (a) loans
  • Independent contractors, self-employed individuals, and sole proprietors
  • Not for profits
  • Accommodations and food service operations with fewer than 300 employees per physical location

For more information on this, please click here

Should you have any questions about the PPP loan forgiveness or need assistance with your business, kindly call us at 954-384-6114 or e-mail us at contactus@oplaw.net.

Originally posted at: https://www.oppenheimlaw.com/covid-19-relief-bill-and-ppp-december-2020/

Tags: covid relief, Economic Injury Disaster Loan, economy, New Stimulus PPP Relief, Payroll Protection Program, stimulus

Leave a Reply

Your email address will not be published. Required fields are marked *