A second round of federal financial stimulus is on the way for American companies. On December 21, Congress passed a bill known as the Economic Aid to Hard-Hit Small Business, Nonprofits and Venues Act. As part of an overall aid package, the $325 billion bill aims to provide further assistance to the businesses and other organizations that have been hit hardest by the economic fallout from the ongoing COVID-19 pandemic. The bill provides $284 billion of funding for a second round of Paycheck Protection Program loans for eligible businesses. Here’s what your company needs to know:
- To be eligible for a Paycheck Protection Program loan, a company must have no more than 300 employees and must demonstrate a year-over-year reduction in revenue of 25% or more for any quarter of 2020.
- Companies that received a previous PPP loan, even those that returned all or part of their previous PPP loans, can apply for a second draw loan.
- Additional types of organizations, including local newspapers, T.V. and radio stations, and certain 501(c)(6) nonprofits, are now eligible to borrow.
- A company’s maximum loan size will be calculated as 2.5X the company’s average monthly payroll costs, up to $2 million.
- Accommodation and food services (NAICS Code 72) companies are eligible for larger loans, with the maximum size calculated as 3.5X average monthly payroll.
- Borrowing companies will be eligible for full loan forgiveness as long as at least 60% of the funds are spent on payroll costs over a selected period. Companies may choose to use the funds over either an eight-week or 24-week period.
- The loan forgiveness process has been simplified for companies that borrow less than $150,000.
- Allowable and forgivable expenses have been expanded to include supplier costs on existing contracts and purchase orders, money spent on adaptive or personal protective equipment for workers, and expenses associated with operational technology and software. Additional group insurance costs (e.g., dental, vision, disability, and life insurance plans) are also eligible. Even expenses related to property damage that occurred during this year’s public disturbances are eligible.
Our Financial Experts are ready to help your business now, you can apply through our full-service portal.