The New Stimulus Act: 15 Big Changes That Will Impact Your Small Business

A new coronavirus relief bill was passed by Congress and has been signed into law. If you run a small business, here are 15 things you need to know about it.

1. There is another round of PPP. Who is eligible?

The bill authorizes approximately $285 billion for another round of the Paycheck Protection Program that’s administered through the Small Business Administration’s (SBA) network of lenders.

However, this time the money is only going to small businesses (less than 300 employee per physical location) that have been specifically impacted by the pandemic. The criteria is that if your business has suffered revenue declines of more than 25 percent in any given quarter this year compared to last year then you will be eligible. The loans are up to $2 million and you can choose an 8 or 24-week forgiveness period. The loan calculation remains at 2.5x payroll and payroll costs for the period chosen unless you’re in the Accommodation and Food Services industry (NAICS Code 72) where you can use a 3.5x factor.

To be eligible for another round of PPP you must have used or will use the full amount of your first PPP, and you need to demonstrate at least a 25 percent reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter.  Borrowers who were not in business during the first, second, or third quarter of 2019 (January 1 – September 30), but were in business during the fourth quarter of 2019 (October 1 – December 31), can compare the first, second, or third quarter of 2020 (January 1 – September 30) to the fourth quarter of 2019.  Applications submitted on or after January 1, 2021 are eligible to utilize the gross receipts from the fourth quarter of 2020.

In addition to the above requirements most businesses and certain non-profit organizations, housing cooperatives, news organizations, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives are eligible for the new PPP loans.

Ineligible entities include:

• entities involved in political and lobbying activities including engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public document
• entities affiliated with entities in the People’s Republic of China
• registrants under the Foreign Agents Registration Act
• entities that receive a grant under the Shuttered Venue Operator Grant program (see below).

Publicly held companies are also excluded from this round. That’s also the case if your business or organization was not in operation on February 15, 2020.

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