Broker Check

Round 2 of Relief

December 18, 2020

The Emergency Coronavirus Relief Act of 2020 is in the final stages of being passed and although all details are yet to be finalized, there is a general framework that warrants consideration and planning.  One of the main focuses is renewed support for the Paycheck Protection Program (PPP).  This means a second round of PPP for small businesses who previously received funds and an opportunity for first time recipients of PPP funds.  For those with existing PPP loans, there is the possibility of a more simplified forgiveness process for loans under certain thresholds.

What you need to know.  As of this writing, the following is being proposed when it comes to PPP:

  • Two Eligible Groups:
    • Second draw loans for the hardest hit borrowers
      • 300 or fewer employees; and
      • 20-30% gross receipts decline in any quarter in 2020 compared to the same quarter in 2019
    • First time borrowers
      • Similar criteria as original PPP loans
      • Adds 501(c)(6) organizations (chambers of commerce, economic development, tourism) with 150 or fewer employees
  • Costs eligible for loan forgiveness:
    • Same as original PPP: payroll costs, covered mortgage interest, rent and utilities
    • Covered worker protection expenditures and facility modification costs: PPE and cost to comply with COVID-19 federal health and safety guidelines
    • Covered supplier costs: expenditures to a supplier that are essential to the recipient’s current operations
    • 60/40 cost allocation between payroll and non-payroll.  

 What you need to do.  Final legislation is yet to be passed and some of the criteria above may change. However, the time is now to start planning if you will be eligible as a first time borrower or you’ve seen a significant decline in gross receipts during 2020. We will continue to monitor the situation and send updates as necessary. If you have any questions or concerns, please do not hesitate to contact us at (770) 287-7800.