Congress Renews Paycheck Protection Program with Some Changes
On December 27, 2020, a second federal stimulus package was signed into law, with some specific measures to help beleaguered small businesses weather the economic challenges brought about by the coronavirus pandemic.
Paycheck Protection Program Reopened
Under the CARES Act (the first stimulus package), Congress established the Paycheck Protection Program (PPP) for businesses to obtain low-interest, and potentially forgivable, loans to cover the expense of payroll and other expenses. That program was suspended in August, 2020.
The new stimulus program reopens the PPP but changes eligibility criteria and caps the amount a business may borrow. The new program is available only to commercial enterprises with fewer than 300 employees. Furthermore, to qualify for PPP funds, a business must demonstrate a 25% decrease in revenues in one of the first three quarters of 2020. Congress expanded the scope of the Paycheck Protection Program by allowing businesses to use the funds for a broader range of expenses, including:
- costs of software or cloud computing services that facilitate business operations,
- property damages sustained because of vandalism or looting during 2020 social protests,
- payments to vendors for goods or services essential to business operations,
- costs of complying with COVID-19 safety requirements, and
- costs of group life, disability, vision, and dental insurance.
The loan cap per business has been reduced from $10 million in the CARES Act to $2 million in the new stimulus package. In addition, the process for obtaining forgiveness of loans under $150,000 has been simplified.
Contact MCIS Law
At MCIS Law, PLLC, in Stafford, we provide comprehensive counsel to startup and existing businesses in southeast Texas. We can help you determine eligibility for stimulus aid and prepare any necessary documents.
For a confidential consultation with an experienced and knowledgeable lawyer, email us or call our office at (346) 297-0121. We are currently communicating with clients by phone, text message, and videoconference. We accept all major credit cards.