By John Asbury CEO, Atlantic Union Bank on December 30, 2020
John Asbury
The latest MetLife and U.S. Chamber of Commerce Small Business Index Survey confirms that small businesses remain concerned about the ongoing impacts of COVID-19. According to the study, “More than three in five (62 percent) small business owners believe the worst of the COVID-19 pandemic is ahead of us.
“With many anticipating worse times, it’s not surprising many small businesses see the need for temporary, targeted government assistance. Nearly three-quarters (74 percent) say additional federal relief funds would be important to their business’s ability to succeed in 2021.”
Fortunately, the “Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act,” was signed into law as part of a broader stimulus bill related to the ongoing COVID-19 emergency. The bill reopens the lending window for forgivable U.S. Small Business Administration Paycheck Protection Program loans through March
By Staff | December 30, 2020 | Filed under: News THE SHOALS-This information was originally shared by the ASBDC on Dec. 22.
There are over 5,500 pages in the pending legislation from Congress, and we haven’t finished reading every line just yet. Here’s what we know now, and what you can expect:
It will take SBA some time to implement what Congress has passed. Most SBA employees are working from home, and many are on holiday leave.
Once SBA has established the rules, it will take time for the lenders to implement them. This legislation addresses issues with the original PPP, and sets new rules for the “second draw” opportunity.
On December 27, 2020, President Trump approved a $900 billion COVID-19 relief bill.
In it, Congress appropriates funds to help small businesses, nonprofits, and venues that continue to be hit hard by the impact of COVID-19 through The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Act ). The Act provides assistance to small businesses mainly by revamping the familiar Paycheck Protection Program ( PPP ). The changes to PPP are many and this article does not address every update. Rather, here are some highlights that you should know.
How has PPP changed?
The Act changes PPP primarily in three ways. First, the Act allows new PPP loan applications to be submitted by eligible applicants that never obtained a PPP loan. Second, the Act permits some businesses that have already obtained a PPP loan to obtain a second PPP loan, called a PPP second draw. Third, the Act changes PPP rules for existing PPP loans, new PPP loans, and PPP second draws in the a
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On December 21, 2020, Congress approved the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Ventures Act. After threatening to veto the bill, President Trump signed the bill into law on December 27. The bill makes some extensions and changes to the Paycheck Protection Program (PPP) established under the CARES Act. Most notably, the act provides $284 billion in additional funding for a second round of forgivable loans through the PPP for small businesses and nonprofits experiencing significant revenue losses.
Eligibility
In this second round, small businesses with no more than 300 employees that demonstrate at least a 25% reduction in gross revenue between comparable quarters in 2019 and 2020 are eligible. There is a maximum loan size of 2.5 times average monthly payroll costs up to $2 million per borrower.
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The U.S. Senate and House of Representatives, on December 21, 2020, approved H.R. 133, referred to as the “Consolidated Appropriations Act, 2021.” This advances to the president legislation to provide appropriations for 2021 and changes to the Paycheck Protection Program (PPP) administered by the U.S. Small Business Administration (SBA). The portions of the legislation providing for the continuation of PPP loans (entitled the “Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act”) has been framed as a major element of Congressional efforts to provide economic relief in the wake of the COVID-19 pandemic. The legislation gives new life to the PPP by extending the program, which had previously expired on August 8, 2020, and creating an option for a “second draw” for PPP borrowers. In addition, the legislation introduces changes to PPP loans that will impact both new and existing PPP borrowers. Any