January 12, 2021

Paycheck Protection Program Reopens for Small Businesses

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By Elizabeth A. Rosso, Attorney

The Small Business Administration (“SBA”) issued updated Paycheck Protection Program (“PPP”) guidance on January 6, 2021, and the PPP reopened on January 11, 2021, as authorized by the Consolidated Appropriations Act of 2021 (“Act”), which was signed into law on December 27, 2020.  The deadline for PPP applications is March 31, 2021.

The Act made some changes to the original PPP and also authorized another round of PPP loans (“second-draw PPP loans”). Changes and second-draw eligibility requirements include:

  • Reauthorization of PPP lending through March 31, 2021
  • PPP loans can now cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures
  • PPP eligibility has been expanded to include 501(c)(6) organizations, housing cooperatives, and destination marketing organizations
  • Existing PPP borrowers are eligible to apply for a second-draw PPP loan, and may be able to modify their existing PPP loans
  • For second-draw loans, eligibility is generally narrower than it was for first-draw PPP loans:
    • Businesses are eligible to apply if they received a first-draw PPP loan and have used or will use the full amount of the first loan by the disbursement date of the second loan
    • A business is only eligible if it has 300 or fewer employees
    • The business must have experienced a 25% revenue reduction in 2020 relative to 2019. Businesses not in operation for all of 2019 may still be eligible to apply, even though they do not have a comparable quarter for purposes of revenue reduction analysis
    • Any entity ineligible for a first-draw PPP loan is also ineligible for a second-draw PPP loan

In addition, to facilitate access to PPP loans for women-, minority-, and veteran-owned businesses, for the first two days of the program (January 11 and 12), the SBA will only be accepting applications from community financial institutions.  Applications from other lenders will be accepted thereafter.

To view the SBA’s official press release, which contains additional guidance and resources, visit the SBA website or click here.

Elizabeth A. Rosso is experienced in helping clients weather COVID-19-related crises, including assessing relief available under federal stimulus packages, and navigating Oregon and Washington emergency declarations, stay-home orders, and reopening plans.  Contact her at elizabeth.rosso@jordanramis.com or (503) 598-7070.


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