The Consolidated Appropriations Act was signed into law on December 27th, 2020. This act follows the CARES Act that was signed into law last March. It aims to provide additional funding and relief to small businesses affected by the pandemic. Part of this Act includes the “Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act)”, allowing a second round of loans available through the Paycheck Protection Program by adding additional funding. The current changes made to the original PPP Loan are found in Section 311, with the Small Business Administration and Treasury releasing guidance on this temporary section in early January.
To download the SBA’s Interim Final Law Concerning Section 311 of the Economic Aid Act, please click on the button below.
Please note, according to the guidance,
“Under section 311, SBA may guarantee loans under the PPP Second Draw Program through March 31, 2021 (“Second Draw PPP Loans”) to borrowers that previously received a PPP loan under section 7(a)(36) of the Small Business Act (“First Draw PPP Loans”) and have used or will use the full amount of the initial PPP loan for authorized purposes on or before the expected date of disbursement of the Second Draw PPP Loan.”
Many of the same terms, conditions, and processes applicable to the “First Draw” or first set of PPP Loans, are applicable to this Second Draw. There are however, some differences. These differences are further explained in the post “New Guidance for Second Draw PPP Loans”. Some of these differences include (but are not limited to):
- Date effective – the rule for Second Draw PPP Loans is effective immediately;
- Applications are open and will close March 31, 2021;
- Eligibility: A Second Draw PPP Loan Borrower can only be eligible if they have 300 or fewer employees, experienced a reduction in revenue during 2020 relative to 2019, received a First Draw PPP Loan and has exhausted or will exhaust all the funds from that loan on authorized purposes by or before the disbursement of the Second Draw PPP Loan funds.
- Businesses assigned with a NAICS code beginning with 72 are eligible if they employ at most 300 employees per physical location (and meets the revenue reduction requirement among other specified requirements).