On December 21, 2020, the U.S. Congress passed an appropriations bill which continues the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) program, and provides other forms of assistance for small businesses impacted by Covid-19.
Although this bill has not yet been signed by the President and the Small Business Administration has not yet issued full guidance, banks are already preparing to accept a new round of applications for this program.
Key highlights are:
- The PPP program is being reopened for “Second Draw” loans up to $2,000,000.
- To be eligible a business must have:
- Less than 300 employees, and
- A reduction in gross revenue of 25% or more in any quarter in 2020 compared to the same quarter in 2019.
- It is expected that more than $20 Billion in new PPP money will come to New York State.
- The money can be used for covered operations expenditures (including payroll), covered damage costs, covered supplier costs, and covered worker protection expenditures.
- PPP loan expenses will now be tax deductible.
- New rules affect PPP loan forgiveness:
- Businesses that received an emergency Economic Injury Disaster Loan (EIDL) advance will no longer have to deduct this from their PPP forgiveness amount. This could be up to a $10,000 benefit.
- Simplified forms and procedures will apply for PPP loans up to $150,000.
- To be eligible a business must have:
Special initiatives include giving restaurants larger forgivable loans than they received in the previous CARES Act programs and also providing a $15 Billion “Save our Stages” program which provides relief to theatres, music venues, independent movie theatres, and other cultural institutions.
In addition, a Targeted EIDL Advance Program is being implemented with subsidies available for certain loan payments due under SBA section 7(a) and 504 loans.
Please note that full details regarding this second round of funding for small businesses is still being issued, and changes and clarifications will likely be released on an almost daily basis.
Tiveron Law has successfully assisted dozens of businesses in applying for and receiving EIDL and PPP loans, often using lenders that were much faster than local lenders with significant lead times. In addition, we can help you to understand the financial, planning, and tax impact of these programs.
Call Tiveron Law’s Business Department at 716-636-7600 if you have any questions about the information discussed here or with any other questions you may have.