WASHINGTON, D.C. — The $900 billion COVID-19 relief package passed by Congress Dec. 21, 2020, contains $325 billion in funding to support small business, including $284 billion to extend the Paycheck Protection Program through March 31, 2021.
The bill was signed into law by President Donald Trump on Dec. 27, 2020.
"This bill is welcome relief for the millions of small businesses that are days or weeks away from closing permanently," according to Sen. Ben Cardin, D-Md., ranking member of the Senate Committee on Small Business & Entrepreneurship.
"In addition to tackling the root of the problem, this bill targets small business aid to the hardest-hit, most vulnerable small businesses — including Black, Native, Hispanic, Asian and women-owned businesses — as well as small businesses in the industries that have been most affected by COVID-19."
- Funding for a second PPP loan of up to $2 million for smaller, harder-hit businesses that employ not more than 300 employees, demonstrate a loss of 25% of gross receipts in any quarter during 2020 versus the same quarter in 2019, and have used the full amount of their first PPP before a second loan is disbursed.
- Simplifies the forgiveness process for loans of up to $150,000 and revises the loan-processing fee tiers to incentivize lenders to make loans to underserved and underbanked businesses.
- Directs the Small Business Administration (SBA) to issue guidance that prioritizes underserved communities and to add a voluntary demographic information section on the applications for initial and second PPP loans, as suggested by the SBA Inspector General.
- Dedicates $15 billion for loans issued by mission-lenders, including CDFIs, MDIs, and SBA 504 and Microlenders, as well as another $15 billion set-aside for certain smaller depository institutions, such as credit unions and farm credit institutions.
- Dedicates $60 billion for borrower "set-asides" — $35 billion for borrowers who were unable to apply for an initial PPP loan, of which $15 billion is for smaller borrowers with up to 10 employees or loans of up to $250,000 in low-income areas; and $25 billion for second PPP loans for the same small borrower category.
"The Bipartisan Emergency COVID Relief Act of 2020 will help provide America's small businesses with more certainty and necessary assistance," Kevin Kuhlman, vice president of federal government relations for the National Federation of Independent Business (NFIB), said.
"This legislation importantly protects small business owners from a surprise tax increase by restoring the deductibility of Paycheck Protection Program (PPP) forgiven expenses, allows for another targeted round of PPP for struggling small businesses, and provides a simplified forgiveness process for PPP loans less than $150,000," Mr. Kuhlman said.
"While we need to review the details of the legislation, we are encouraged by the progress made thus far. We recommend continued work to create liability protections for small businesses."