On December 27, 2020, President Trump signed the Consolidated Appropriations Act of 2021, which included approximately $284 billion in Paycheck Protection Program (PPP2) funding, a move designed to position the program for a second round of financial relief for businesses suffering from the COVID-19 pandemic. The program will run through March 31, 2021, and will provide a maximum loan amount of $2,000,000 and will require borrowers to meet the following eligibility requirements:
- Your business has less than 300 full-time, part-time, or seasonal employees; if you have multiple locations, you may not have more than 300 employees per location.
- You are able to demonstrate a revenue reduction of at least 25% in any quarter of 2020 (when compared with the same quarter in 2019).
- You have used or will use the full amount any initial “First Draw” PPP loans.
- Your business was operational before February 15, 2020 and remains operational.
On January 8, 2021, The Treasury Department and the Small Business Administration announced that PPP2 second draw borrower application process is open and the form will be accepted from borrowers beginning the week of January 11th. To download the application, please visit the Second Draw Borrower Application on the SBA website.
So, what does this mean for you? As with any significant new legislation or economic relief program, applying a high-level understanding of the law to your specific situation is important to sound decision-making. Prospective PPP2 borrowers should reach out to their accountants and financial advisors to discuss eligibility and next steps. Our team will continue to update this article as new information and guidance are released.