Paycheck Protection Program 2.0 – Congress Authorizes Round 2 of Funding for Borrowers

On December 21, Congress passed sweeping changes to the Paycheck Protection Program (PPP) as part of a $900 Billion Economic Relief Package to aid small businesses impacted by COVID-19.

$284 Billion dollars of the relief package was allocated to fund PPP 2.0 loans. This provided funding for new loans to small businesses and it also benefits businesses that had already received a PPP loan in 2020. This article explains who may be eligible for additional funding, also known as a “second draw” loan. 

Updated on 12/28: President Trump signed the coronavirus relief package into law on December 27, days after he suggested he would block the bill if the stimulus checks weren’t raised to $2,000, from $600. The Democratic-held House plans to vote on a measure to increase the payments, it is uncertain if the Senate will vote, or if any additional provisions will be included, or changed. 

Lurie’s team has put together a summary of the current economic relief package in this article, and will update as new information becomes available. Please reach out to your Lurie advisor for questions. 

Who May Qualify to Receive a PPP 2.0 Loan:

  • Eligible entities include any business concern, nonprofit, eligible self-employed individual, sole proprietor, independent contractor (and others). 
  • Entity must have no more than 300 employees.
  • Entity must have a reduction in gross receipts of at least 25% for a quarter in 2020 compared to the same quarter in 2019. 
  • No requirement to have applied for forgiveness on your first PPP loan but required to have used or will use your first PPP loan funds for qualified purposes.

Deadline for Application:

Maximum Second Draw PPP Loan Amount:

  • General Rule  
    • The lesser of:   
      • 2.5 x the average monthly payroll during the 1year period ending on the loan date or calendar year 2019;  
      • or $2,000,000. 
  • Entities with NAICS code beginning with 72 (Accommodation and Food Services)  
    • The lesser of:   
      • 3.5 x the average monthly payroll during the 1year period ending on the loan date or calendar year 2019; or  
      • $3,000,000.  

Entities That Are Not Eligible for the Program:  

  • If an entity organized in China or Hong Kong owns or holds 20% or more of the economic interest in the business.  
  • If a member of the board of directors of the business is a person who is a resident of China. 

For More Information

This is just an overview of the new PPP loan provisions of the Consolidated Appropriations Act of 2021 provisions – and not meant to replace guidance from your CPA or Lurie advisor.

Our team is monitoring the latest developments closely and will update with additional guidance in our SBA Resource Hub. In the meantime, please contact your Lurie advisor with any specific questions. We are here to help. Click here to contact us.

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Our CPAs can help you navigate complex PPP loan forgiveness rules including calculation and documentation requirements.
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