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Congress has passed another Covid relief bill and there is help for businesses who experienced a decrease in revenue in 2020.  Here’s the broad brush strokes:

  • REVERSED: EIDL grants (i.e. the portion of the loan that just kind of showed up in your bank account one day)… will NOT reduce PPP loan amounts.
  • AMENDED INCREASE FOR PPP LOAN: expenses for group life, dental, vision, and disability count as “payroll costs”. You can amend the first PPP loan you applied for to reflect this… it’s up to you to decide if the “juice is worth the squeeze”.
  • An additional round of PPP loans is available IF the business has experienced a decrease in gross receipts / revenue of 25% or more. The additional round allows for more expenses to be paid for with the PPP loan… however, I’d still try to overkill it by putting 100% towards employee compensation.
    • INCREASE FOR PPP LOAN FOR RESTAURANTS & HOTELS: PPP loan amount was 2.5X monthly “payroll costs”… this new law increases that to 3.5X for restaurants & hotels (not sure if that multiplier effect is retroactive to the first round of PPP loans).
  • PPP loan forgiveness is easier & PPP loans that are forgiven will NOT be considered taxable income
  • ROUND 2 for EIDL Loans require a 30% or greater reduction in gross receipts AND less than 25 employees. (these are the loans that must be repaid at 3.75% interest over 30 years… best small business credit terms ever).
    • Maximum loan amount is 50K
    • GRANTS will be included in the same way as before ($1K per employee up to $10K)
    • PRIORITY given to:
      • Businesses located in low-income communities: – IF “low” or “moderate”… that is usually the definition of “low income” for most gov’t programs
      • Military / veteran owned businesses
      • “economically or socially disadvantaged individuals” – i.e. minorities.

SIDE NOTE PSA: There is also specific funding for the arts venues… theater venues, concert halls, “cultural entities” etc…. are eligible for grants up to 45% of gross revenues capped at $10 million. The definition of “arts venue” will be a key item to watch.

 If you qualify, apply for the loans through the same channels as you did for the first round.