The long-awaited 2nd round of economic stimulus to assist small businesses has arrived. U.S. Small Business Administration (SBA) announced that the Paycheck Protection Program (PPP) opens this week for new borrowers and certain existing PPP borrowers.
The Paycheck Protection Program (PPP) provides loans to help businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. First Draw PPP Loans can be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations. It’s important to emphasize that these loans are forgivable if employee retention criteria is met and the funds are used for eligible expenses.
This round of the SBA PPP includes new provisions such as:
- PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best fit their business needs
- The program eligibility has expanded to include 501 (c ) (6), housing cooperatives, direct marketing organizations, and more
- The new bill makes all qualified PPP expenses deductible, essentially making 100% of PPP proceeds tax-free.
- Allows for businesses who have experienced a 25% decrease in revenue for any 2020 quarter, as compared to the same quarter in 2019, to apply for a second PPP loan (PPP2).
Details like these and more will be shared at the upcoming seminar “Impact of the Pandemic from a Tax Perspective”, 3-Part Series. On January 21st- Part II of the series, the first topic of discussion will be the SBA Paycheck Protection Program (PPP) new provisions. A representative from the U.S. Small Business Administration, South Florida District Office will be in attendance as well as an accounting firm, professional tax preparer, and more. You will have the opportunity to ask questions and information on how to obtain technical assistance will be provided.