By Carmen Reinicke | CNBC
Small businesses hit by the pandemic recently got some good news – the $900 billion relief act signed into law by President Donald Trump granted additional funding for the Paycheck Protection Program, a forgivable loan program established by the CARES Act.
The $284 billion allocated gives those that weren’t approved for the first iteration another chance to apply and allows businesses that have exhausted previous PPP money and have been significantly impacted by the pandemic to apply for a second draw.
It also makes forgiveness easier for businesses that use the majority of the money for payroll and makes the loans tax-free.
“The “PPP Loans 2.0” program promises to reach more small businesses and independent contractors unlike in the first round, and as of January 13, companies have already begun submitting applications for loans under this second round.’
“If you’re considering applying, just keep in mind a few key differences under the new round: (a) no business or corporate group can get more than $20M combined across all loans or $4M, and (b) you can apply in the second round even if you received funding under the first round but, you have to be a business that lost at least 25% in any single quarter during 2020. There’s also great news for restaurant businesses. Businesses in the food service industry can qualify for 3.5X the payroll (instead of 2.5X as is allowed in other industries).”
Shruti Gurudanti, Rose Law Group Chair of Corporate Transactions