With hope on the horizon, it is our sincerest desire that 2021 brings good health for families and businesses in our communities. The second round of PPP gives forgivable funds for COVID prevention measures. While all the specifics of this new PPP have not been released, we are anticipating the next round funds to be distributed more seamlessly and be put into the hands of the people who need it the most. Here are a few highlights:
- Small businesses and the underserved will receive priority. In his article PPP Loans Part 2—What Small Businesses Need To Know, Brock Blake, contributor to Forbes noted "one of my favorite aspects of this new bill fixes something that caused undue heartache and problems in the first round. Of the $285 billion set aside for PPP, $12 billion is designated specifically for minority-owned businesses and businesses in underserved communities.”
- Of particular interest for restaurants. Florida Restaurant and Lodging Association reported restaurants that qualify for the new Paycheck Protection Program loans can receive 3.5 times their average monthly payroll cost, compared to other small businesses, which are eligible for 2.5 times the amount.
- Tax deductions for Coronavirus PPE, cleaning products and services. In addition to payroll costs, businesses spending on personal protective equipment, cleaning products and services and COVID-related adaptations will be forgiven under the new loan terms. This is great news for businesses!
PPP Second Draw Loans and Eligibility
(Excerpted from National Law Review) On Dec. 21, 2020, Congress approved H.R. 133, referred to as the “Consolidated Appropriations Act, 2021” (the Act). The Act (creates a second loan from the PPP, called a “PPP second draw” loan for smaller and harder-hit businesses, with a maximum amount of $2 million.
In order to receive a PPP second draw loan under the Act, eligible entities must:
- Employ not more than 300 employees (as opposed to 500 employees in the first round of PPP). Unless subject to an exemption, e.g., hospitality (NAICS code 72), the SBA affiliation rules apply in determining the number of employees;
- Have used or will use the full amount of their first PPP loan; and
- Demonstrate at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same quarter in 2019.
Eligible entities must be businesses, certain nonprofit organizations, housing cooperatives, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives.
We're always here to help
Partnering with a professional disinfecting services company for enhanced cleaning and preventative disinfection provides the necessary tools to keep your business running safely while taking advantage of the deductions available. If you find yourself with these benefits and needs for your business, please call us or fill out the form below to inquire about our COVID preventative services.