On December 27, 2020, President Trump signed into law The Consolidated Appropriations Act, 2021 (HR 133), an omnibus package that funds government agencies through the entire 2021 Fiscal Year and provides $908 billion in COVID-19 related relief. Included in this legislation were a number of updates to the Paycheck Protection Program (PPP). The PPP is now actively lending to qualified businesses:

  • The Treasury Department and the Small Business Administration (SBA) announced that lenders would start to accept applications for new PPP loan borrowers starting the week of January 11.
  • Second Draw loan applications will begin to be accepted starting January 13.

The Agencies have released the following one-pagers:

Top line Overview of First Draw PPP

Top line Overview of Second Draw PPP

Applications are available for download:

PPP Borrower Application Form

Second Draw Borrower Application Form

H.R. 133 also included a number of structural changes to the Paycheck Protection Program. An overview of those changes is included below:

  • Extends the PPP application period to March 31, 2021.
  • Provides additional Economic Injury Disaster Loans (EIDL) money and extends covered period for Emergency EIDL grants through December 31, 2021.
  • Allows PPP loan funds to be used for personal protective equipment (PPE) and infection control mitigation expenses.
  • Allows expenses already—or expected to be—paid for with PPP funds to be tax deductible.
  • Creates a simplified forgiveness process for PPP loans under $150,000.
  • Repeals the requirement that PPP borrowers deduct the amount of their EIDL advance from their PPP forgiveness amount and requires the SBA to issue rules that ensure borrowers are made whole if they received forgiveness and their EIDL was deducted from that amount.
  • Permits PPP borrowers to apply for the Employee Retention Tax Credit (ERTC) and expands the wage cap and percentage of eligible wages for that credit.
  • Creates a second loan from the PPP program called a “PPP Second Draw” loan, designed for smaller and harder hit businesses with a maximum amount of $2 million.
  • Allows 501(c)(6) organizations to qualify for PPP loans, provided lobbying activities do not comprise more than 15 percent of receipts or 15 percent of activities.

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