Paycheck Protection Program Reopened
The Paycheck Protection Program is reopened with over $284B in funds available for new loans. For new borrowers, as well as borrowers who have already received a loan and not yet applied for forgiveness, the law expands eligible non-payroll costs to include certain covered operations expenditures, property damage costs, supplier costs, and worker protection expenditures. Non-payroll costs remain limited to less than 40% of the loan amount. Additionally, for all borrowers who have not yet applied for forgiveness, the safe-harbor deadline to restore wage and employment levels is extended from December 31, 2020, to September 30, 2021.
Second Draw PPP Loans
Second PPP loans are available to businesses that received a PPP loan previously and that meet special requirements, including:
- Second-time borrowers must have 300 or fewer employees.The rules of the program may limit participation if your organization has related entities, or if you are in certain industries. Check the Small Business Administration’s PPP website (https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program) or speak to your trusted legal or accounting advisor for more information.
- To be eligible for a second PPP loan, businesses will need to demonstrate a reduction in revenue of at least 25% between corresponding quarters in 2020 and 2019. Special rules apply to businesses that were not in operation for all or part of 2019.
- The maximum amount for second draw PPP loans is $2 million.
- Borrowers must have fully spent the loan proceeds from their first PPP loan before their second PPP loan is disbursed.
As a reminder, PPP loans are designed to be 100% forgivable as long as the proceeds are spent in accordance with program rules.
If you need more information or guidance on this topic or other HR information, contact us at 1-855-538-6947 Ext. 108 or visit www.myhrconcierge.com for more information and HR needs.