On December 21, 2020 Congress passed the Consolidated Appropriations Act 2021, the new COVID-19 relief bill. The new bill provides relief to individuals and small businesses with another stimulus payment of $600 and another $284 billion to the Small Business Association for the first and now second Payroll Protection Program (PPP) loan forgiveness program as well as another $20 billion for Economic Injury Disaster Loan (EIDL) grants to small businesses.

One thing that is clear with the passing of this new COVID-19 relief bill, is that Congress is focused on helping small businesses throughout this pandemic by including a second round of PPP loans. This second round of PPP loans are available to those businesses that received the first round of PPP loans and first-time borrowers, who were in business as of February 15, 2020.

To be eligible for a second round of PPP loan, the business must meet the following requirements:

1. Have 300 of fewer employees

2. Have used or will use the full amount of their first PPP loan

3. Can show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019

For first-time borrowers, the eligibility requirements are as follows:

1. Businesses with fewer than 500 employees that are eligible for other SBA 7(a) loans

2. Sole proprietorships, independent contractors, and eligible self-employed individuals. Not- for-Profits, including churches

3. Accommodations and food services operations with fewer than 300 employees per location

The bill also addresses previous borrowers that have returned all or part of their previous loan amount to reapply for the maximum amount available to them.

Also, the new PPP loans expand on the eligible expenses that the funds can be used for. The eligible expenses include the original PPP loan expenses (payroll, rent, utilities, etc.) and the following additional expenses; covered worker protection expenses, covered supplier costs, and covered property damage costs due to public disturbance that occurred in 2020.

Do you have questions on your eligibility and the application process or forgiveness process for the first PPP loan that you received? Reach out to me at [email protected] and I will help answer any questions you may have and guide you through the process.

Julie Moran, C.P.A.

Specializing in Individual and Small Business Tax Consulting and Tax Preparation