Good news for small businesses with changes to PPP loans with the new stimulus bill. A $900 billion stimulus bill is now law.
This stimulus bill includes significant updates to the Paycheck Protection Program.
These changes apply to existing or new PPP loans. While the past changes were helpful, this makes the loan more beneficial to more people.
PPP program has reopened, with changes to allowable expenses and loan forgiveness process. Some businesses will even qualify for a 2nd draw program.
Eligible expenses now include more categories including business operation expenses. Other examples include supplier goods (if they are essential to your business,) and retrofitting to meet Covid safety requirements.
Covered period still begins the date that your loan originates. But the borrower gets to choose the end date, as long as it is 8-24 weeks after receiving the loan.
PPP loans are no longer taxable, even if the loan is completely forgiven.
A second PPP loan is available for certain businesses. You have to have fewer than 300 employees (instead of 500 for the first loan.) You also have to show a 25% drop in gross receipts from a quarter in 2020, compared to 2019. Maximum for this loan is $2 million.
Watch the US Chamber’s video for more details.