$900 Billion COVID Relief Package Assists Small Business Owners and Others
President Trump recently approved a $900 billion COVID-19 relief package (the Consolidated Appropriations Act, 2021) that will assist small business owners and other Americans who are struggling due to the pandemic.
Among other provisions, the bill includes help for small business owners.
Help for Small Businesses
Around $285 billion in funds is available through the Paycheck Protection Program (PPP) “second draw” program. The criteria for eligible businesses to receive the maximum loan of $2 million includes:
- The business employs less than 300 employees;
- The business should not have used or will not use the full amount of the first PPP loan; and
- The business must demonstrate at least 25 percent reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same quarter in 2019.
Business owners that borrow money through this program will be forgiven the loan to the amount equal to the sum of payroll costs, rent or mortgage, operating expenses, utilities, and damage, supplier, and worker protection costs. The bill expands covered expenses to include remote-work software, cloud computing, and government-mandated items that assist with sanitation, such as air filtration systems.
A notable aspect of the bill is the employee tax retention credit, which encourages employers not to reduce their workforce. During the first round of PPP, business owners who cut their employees were not eligible for the credit. With this provision, they are eligible.
Business owners who previously received a PPP loan must meet the qualifications able may be eligible for the second loan.
Help is available