Paycheck Protection Program (PPP)

PPP Second draw application can be found here

• $284.45 billion appropriated in latest round of PPP (program total authorization rises to $806.5 billion lifetime) and includes a number of carve-outs:
  • $35 billion set aside for first-time borrowers
  • $25 billion is set aside for smaller organizations with 10 employees or less or loans less than $250,000 in low-income areas.
  • $15 billion in guarantees for CDFI’s and MDI’s to participate in the program
• Establishes 2nd Draw criteria:
  • Max loan amount of $2 million
  • For organizations with less than 300 employees
  • Must have used or will use the full amount of first PPP loan
  • Must show at least a 25% reduction in revenue in the first, second, or third quarter of 2020 as compared to the same period in 2019; applications submitted on or after January 1, 2021, may use a fourth quarter 2020/2019 comparison
  • 60/40 cost allocation between payroll and non-payroll costs to receive full forgiveness remains the same for 2nd Draw
• Increases the PPP loan amount for NAICS 72 businesses (Accommodations and Food Service)
• Creates a simplified PPP loan forgiveness application for loans under $150,000 dollars whereby the borrower signs and submits a one-page certification that requires the borrower to list the loan amount, the number of employees retained, and the estimated total amount of the loan spent on payroll costs
• Makes eligible 501c6s, destination marketing organizations (DMOs), housing cooperatives, newspapers, broadcasters, and radio stations
• 501(c)6 organizations are eligible to participate, including economic development organizations that are registered as 501(c)6 organizations, if:
  • Less than 300 employees
  • Not more than 15% of gross receipts from lobbying activities
  • Not more than 15% of organization activity constitutes lobbying
  • Not a professional sports league or political campaign or activity
  • Effective date is ‘as if it were included in the CARES Act’, meaning 501(c)6 organizations are effectively retroactively eligible
• Repeals the CARES Act provision that requires PPP borrowers to deduct their EIDL Advance from their PPP loan forgiveness amount
• Program extended until March 31, 2021
• Tax issues resolved:
  • Gross income does not include any forgivable amount of the PPP loan
  • Deductions are allowed for deductible expenses paid for by any forgiven amount from PPP loan
  • PPP loan is not taxable
• Eligible uses formally expanded:
  • Covered operations (software, tech, human resources, etc), covered property damage (associated with ‘disturbances’ happening during 2020), covered supplier costs (supplies, inventory, etc), covered health and safety expenses (PPE, testing, etc) were further clarified as eligible uses of PPP loans and eligible for forgiveness
  • Benefits such as life insurance, disability insurance, vision and dental were also clarified to be eligible covered expenses
• Borrower may select their covered period end date, between 8 and 24 weeks after origination

Economic Injury Disaster Loan (EIDL)

• Provides $20 billion dollars to restart and extend the SBA’s EIDL Advance Grant for small businesses
• EIDL Advance grantees that received less than $10,000 dollars to reapply for the difference between what they received and the maximum EIDL Advance Grant of $10,000
  • Prioritizing business who:
    • Are eligible for New Market Tax Credits
    • Have 300 or fewer employees
    • Can show a 30% reduction in gross receipts for an 8-week period between 3/2/20 and 12/31/20
• Increases verification tools at the SBA to ensure accurate information is submitted on a grant application

Shuttered Venue Operators Grant

•  $15 billion dollar grant program for eligible venues, theaters, museums, and zoos
• Grants to live venue operators that can demonstrate significant loss
• Up to 45% of budget or $10 million grant