Yesterday, Congress passed a $900 billion economic relief package which has been sent to President Trump for his signature. The bill has a number of critically important provisions, such as extensions to state and local governments to spend previous dollars; direct payments to qualifying Americans; additional unemployment aid through the Pandemic Unemployment Assistance Program and Pandemic Emergency Unemployment Compensation programs, and more.
Of special note for the business community is the allocation of an additional $284 billion for another round of the Paycheck Protection Program (PPP), and a Second Draw loan program. Small businesses who employ less than 300 employees, have used or will use their full amount of their first PPP, and can demonstrate a 25 percent reduction in gross receipts will be eligible for a PPP Second Draw Loan. The legislation creates a simplified PPP loan forgiveness application, and strengthens lender hold harmless provisions. Eligibility was expanded to include some 501c6s, housing cooperatives, newspapers, broadcasters, and radio stations. Further, the CARES Act provision that required PPP borrowers to deduct their EDIL Advance from their PPP loan forgiveness amount is repealed. Of critical importance is the resolution to the question of tax deductibility of expenses covered by PPP loan proceeds- business owners may claim deductions for such expenses.
The EIDL Advance program also received an additional $20 billion, creating a process where existing grantees who received less than the $10,000 may reapply for the difference of what they received and the maximum grant of $10,000.
Venues, museums, theatres and zoos also will have access to relief through a $15 billion grant program for shuttered venues. Other SBA small business loans are also expanded and enhanced, such as the 7a, 504, and Microloan program.
The bill calls on the SBA to issue emergency rulemaking, so we will be watching for those updates over the next ten days and communicate those, and other helpful resources, as they are released. Please check our COVID-19 Resource Page for links to other helpful documents and overviews, including a one-page overview for small business, small business section-by-section overview and a stimulus fact sheet for small business.