March 10, 2021
The Biden Administration announced changes to the Paycheck Protection Program two weeks ago. The changes allow the smallest of small businesses, so-called “Mom and Pop” businesses, greater access to the program. Included in the changes is a 14-day exclusive period during which only small businesses with 20 or fewer employees are eligible to apply for PPP loans. The exclusivity period began February 24 and ended March 9th. Now that the period is over lenders may submit applications from all eligible small businesses. In addition to the exclusivity period, the Biden Administration announced changes which expanded eligibility and increased the amount of loans for certain small business owners.
Policy Changes and Additional Changes:
In addition to the changes made by the Biden Administration, the Economic Aid Act, which reopened the Paycheck Protection Program, expanded the program, and offered clarification on how the loans are taxed.
Changes Implemented by the Economic Aid Act:
The Economic Aid Act reopened the Paycheck Protection Program for both First Draw Loans and Second Draw Loans. Eligible small businesses that did not previously obtain a First Draw Loan may apply for a PPP loan. The original eligibility rules and limitations apply to all First Draw Loans. Second Draw Loans are available to certain small businesses who received a First Draw Loan. To be eligible for a Second Draw Loan a business:
The deadline to apply for the Paycheck Protection Program is March 31, 2021. All eligible entities can apply through a participating lender until then.
As always, the business lawyers at RCO Law stand ready to counsel you on COVID 19-related business issues.
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