31 Dec New Stimulus: Coronavirus Relief and Omnibus Funding Bill
Below please find information regarding the new stimulus bill legislation that was recently signed into law. It provides several important changes to previously issued COVID-19 relief programs.
Paycheck Protection Program Reopened
- The Paycheck Protection Program is reopened with over $284B available for new loans.
- $15B in funding for Live Venues
- $20B for New Economic Injury Disaster Loan grants for businesses in low-income communities.
Limited Eligibility for Second Round PPP Loans:
- Available to first-time qualified borrowers
- Available to borrowers that previously received a PPP loan
- Second-time borrowers must have 300 or fewer employees.
Maximum Loan Amount:
Borrowers have an option to calculate the maximum loan amount by multiplying the borrower’s average total monthly payroll:
- the one-year period prior to the date on which the loan is made, or
- calendar year 2019, by 2.5x.
The maximum loan amount in the second round is $2 million.
Maximum Loan Amounts for the Hospitality Industry:
Borrowers that have NAICS Code 72 (typically restaurants and hotels) are permitted to use a 3.5x multiplier of their average monthly payroll costs to calculate their maximum loan amount, subject to the $2 million cap.
Use of PPP Funds:
Congress expanded the types of expenses for which PPP loans can be used, which applies to existing PPP loans (except in the event forgiveness has already been obtained) and new loans. In addition to payroll, rent, covered mortgage interest and utilities, the PPP now allows proceeds to be used for:
- Covered Operations Expenditures
- Covered Property Damage Costs
- Covered Supplier Costs
- Covered Worker Protection Expenditures
As a reminder, PPP loans are designed to be 100% forgivable if the proceeds are spent in accordance with program rules. Additional Paycheck Protection Program Round 2 highlights and immediate information can be found in the National Law Review.