A bipartisan group of congressional lawmakers provided a summary of their proposal for a COVID-19 relief package that could be passed into law as early as next week. The measure, known as the Bipartisan Emergency COVID Relief Act of 2020, is still being negotiated in Congress and we expect many of the particulars to change in the coming days. Nevertheless, the proposal may impact current borrowers under the Paycheck Protection Program (“PPP”). Below is a summary of the key PPP and small business provisions of the proposed act as shared on December 9, 2020. We are continuing to monitor this proposal and will provide updates as it makes its way through the legislative process.
Potential Updates to the Paycheck Protection Program & Small Businesses:
- Second PPP loans for the “hardest-hit” small businesses. Additional funding may be provided to allow the hardest-hit small businesses to receive a second forgivable PPP loan. Eligibility would be limited to small businesses with 300 or fewer employees that have sustained a 30 percent revenue loss in any quarter of 2020.
- 501(c)(6) organizations eligible for PPP loans. 501(c)(6) organizations that are not lobbying organizations and have fewer than 150 employees would become eligible for PPP loans.
- Expansion of forgivable expenses. Forgivable expenses are expanded to include supplier costs and investments in facility modifications and personal protection equipment to operate safely.
- Tax deduction for expenses paid for with proceeds of PPP loans. Business expenses paid for with proceeds of PPP loans become tax deductible.
- Simplification of loan forgiveness process. The loan forgiveness process would be simplified for borrowers of PPP loans of $150,000 or less.
- Funds set aside for smaller borrowers and underserved communities. Additional funds would be set aside to ensure that smaller borrowers and underserved communities get the help they need, including small businesses with 10 or fewer employees and loans made by small community lenders.
- Funding for live venue operators. Additional funding would be made available for independent live venue operators affected by COVID-19 stay-at-home orders.
- Additional funding to existing SBA loan programs. Additional funding would go to the SBA to increase its existing guarantees on SBA 7(a), 504 and microloans, as well as Economic Injury Disaster Loan grant advances.
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