On December 21st, Congress passed the Consolidated Appropriations Act, 2021 which was then signed by President Donald Trump on December 27th. The good news in this bill, for business owners who are still struggling after a tough 2020, is that they may be eligible for a second round of monies from the Small Business Association.
The Small Business Association provides various details, but The PPP now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP loan with the same general loan terms as their First Draw PPP loan.
Second Draw PPP loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
A borrower is generally eligible for a Second Draw PPP loan if the borrower:
o Previously received a First Draw PPP loan and will or has used the full amount only for authorized uses
o Has no more than 300 employees; and
o Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
Hopefully, many small business owners with find this as welcome news going into 2021.
Charles F. Ott, MBA/CPA
Co-Managing member
cott@ljcpa.com