The next round of the Paycheck Protection Program (PPP) is getting underway today, and there is a healthy amount of funding available -- around $280 billion.
Congress learned a number of lessons during the first round of PPP -- comparative fairness for smaller businesses and the rigors of applying for a loan being chief among them.
Similar to the first round, the updated initiative comes in the form of forgivable loans for small businesses. However, there are some key eligibility differences. One of the more important differences is that any costs associated with PPP loans are tax-deductible, something that created some confusion in the CARES Act.
When it comes to the simplicity of applying for a PPP loan, a new streamlined forgiveness application has been promised, and any loan under $150,000 and coming from the SBA will not require documentation.
Other perks in the latest round of the Paycheck Protection Program include:
Advantages for the hospitality industry
Eligible and forgivable expenses include costs for personal protective equipment associated with outdoor dining, a welcome relief for restauranteurs trying to dance the line between local and state mandates on capacity.
Hotels and restaurants are also getting a nice bump by being able to apply for a PPP loan at a better payroll multiple than most other businesses.
The new eligibility requirements for a PPP loan include lowering the ceiling on total employee count to 300 and earmarking a benefit for businesses that operate in low- and moderate-income areas with fewer than 10 employees.
Businesses that are applying for a PPP loan a second time face a new cap at $2 million, and they have to be able to demonstrate a quarterly revenue loss of 25 percent or more for the same quarter in 2019.