Paycheck Protection Program Round 2: The Highlights
National Law Review, Volume X, Number 363
After much deliberation, Congress finally agreed to approve a $900 billion COVID-19 relief package as part of the Consolidated Appropriations Act, 2021. Included in that amount is $284 billion for a second round of the Paycheck Protection Program (PPP). 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)
- loan eligibility for Section 501(c)(6) not-for-profit organizations for the first time
- $15 billion for live venues, independent movie theaters and cultural institutions
- $20 million for the Economic Injury Disaster Loan Program
While based on similar principles as the first round of PPP funding under the CARES Act, the second round of PPP has some key differences that are set forth below. Please note that guidance and regulations related to this second round of PPP have not yet been issued. (The Small Business Administration (SBA) must provide these regulations within 10 days of the enactment of the Act.) We expect to provide updates as such guidance and regulations are issued. Several of the key changes are summarized here.