Fri, 01/08/2021 - 2:00pm tim
Vermont Business Magazine The US Small Business Administration, in consultation with the Treasury Department, announced today that the Paycheck Protection Program will re-open the week of January 11 for new borrowers and certain existing PPP borrowers.
To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13.
The PPP will open to all participating lenders shortly thereafter. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on January 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.
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On December 27, 2020, President Trump signed the 2021 Consolidated Appropriations Act, which also contained the latest stimulus relief bill. Part of that bill was the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venue Act, which made changes to all Paycheck Protection Program (PPP) loans, re-opened the PPP program for new loans, and allowed certain borrowers to obtain a second PPP loan.
This post specifically looks at the changes implemented by the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venue Act (the “Act”) that affects new PPP borrowers. The changes previously discussed that will affect all PPP borrowers will also affect new borrowers. The changes below only affect new PPP borrowers, and do not affect existing outstanding PPP loans. The changes below are based on the text of the Act, and may be further modified or clarified by subsequent regulations or guidance.
Who Needs to Know
Why It Matters
In addition to allocating $284.45 billion in new funding, this package of laws include significant clarifications and modifications to the PPP that are important to borrowers and lenders.
On December 27, 2020, the President signed into law the Consolidated Appropriations Act, 2021, which included the Economic Aid to Hard-Hit Small Businesses, Non-profits, and Venues Act (the Act), the COVID-Related Tax Relief Act of 2020, and the Taxpayer Certainty and Disability Relief Act of 2020. These laws include significant clarifications and modifications to the Paycheck Protection Program (PPP), which terminated on August 8, 2020. The COVID-Related Tax Relief Act of 2020 solidifies the tax-free treatment of forgiven PPP loans. In addition to allocating $284.45 billion to the PPP for 2021, the Act:
To embed, copy and paste the code into your website or blog:
On December 27, 2020, President Trump signed the 2021 Consolidated Appropriations Act, which also contained the latest stimulus relief bill. Part of that bill was the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venue Act, which made changes to all Paycheck Protection Program (PPP) loans, re-opened the PPP program for new loans, and allowed certain borrowers to obtain a second PPP loan.
Ability to Apply for a Second PPP Loan. While the CARES Act originally limited eligible small businesses to one PPP loan, Section 311 of the Act creates a new opportunity for certain PPP borrowers (including those that received a PPP loan in 2020 or that will receive a new PPP loan in 2021) to apply for one additional PPP loan, a so-called “second draw” loan. In order to apply for a second draw loan, the PPP borrower will need to have utilized 100% of their prior PPP loan prior to distribution of the second draw loan. This
CAA”), which provides $900 billion in new COVID-19 relief funding, was signed into law on December 27, 2020. Section 324 of Title III of the CAA, the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (the “
Hard Hit Act”), introduces a new $15 billion grant program through which the U.S. Small Business Administration (the “
SBA”) will provide aid to struggling live venue operators and related businesses. This program offers a critical lifeline from the Federal government for the nation’s performing arts venues, movie theatres and museums. Grants made under such program are referred to in this publication as “
SOS Grants”.
This article details the key terms of the SOS Grant program. For information about the changes implemented to the Paycheck Protection Program (the “