Congress adjourned on Friday July 31, 2020 for a weekend recess without reaching consensus regarding the stimulus proposal released by Senate Republicans on July 27th. The $1 trillion proposal includes multiple bills which are meant to be passed as a package called the Health Economic Assistance Liability Protection & Schools (HEALS) Act. In addition to another round of stimulus checks for individuals, the proposal contains some key provisions which would continue to help alleviate the hardships faced by many of the country’s small businesses. Among those provisions are:
- Changes to the original Paycheck Protection Program (PPP)
- Simplified forgiveness procedures for loans under $150,000 and $2 million
- New loans under the original program are capped at $2 million
- Inclusion of certain 501(c)(6) organizations
- A second draw PPP
- Employee count under 300
- Demonstrate a 50% reduction in gross receipts in the first or second quarter 2020 compared to 2019
- No NAICS code restriction
- Same loan formula (2.5x monthly payroll costs), but capped at $2 million
- Publicly traded companies are ineligible
- Aggregate of a first and second round loan cannot exceed $10 million
- Expanded expense eligibility for PPP funds
- Covered operations expenditures – software, cloud computing, HR and accounting expenses necessary for business operations
- Property damage – costs to repair damage caused by public disturbances not covered by insurance
- Covered supplier costs – payments to a supplier of essential goods under a contract for goods in effect prior to February 15, 2020
- Covered worker protection expenditure – expenses for adaptive investments to help the borrower comply with federal health and safety guidelines
- New recovery sector business loans
- Guaranteed loans up to $10 million
- 20 year repayment
- 500 or fewer employees; and
- Demonstrate a revenue reduction of at least 50% compared to last year; and
- Have their principal place of business and earn at least 50% of revenues in low-income census tracts, or
- Be a seasonal employer seeking a loan of less than $1 million.
- Double-dipping is not allowed – You cannot receive a second PPP loan and a Recovery Sector Business loan
We Can Help
PPP options continue to emerge at a brisk pace. We can help ensure you’re informed and assist with guiding you through the process. Contact a member of our team or fill out the form below to see how we can assist you and your business.
For more helpful resources to navigate COVID-19, visit the Elliott Davis COVID-19 Resource Center.
The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change as a result of rapidly evolving legislative developments and government guidance.