Paycheck Protection Program Set to Reopen Week of January 11, 2021
The Paycheck Protection Program will officially reopen the week of January 11, 2021 according to a press statement released today by the US Small Business Administration (SBA) and US Department of Treasury. First draw loans are open beginning January 11 and second draw loans will open on January 13. Important note from the joint SBA/Treasury statement, “To promote access to capital, community financial institutions will be the only eligible lenders at the start of the PPP reopening and all participating lenders will be able to participate shortly thereafter.” SBA/Treasury also released accompanying guidance documents; the full statement and these documents may be accessed here.
The new guidance released includes:
- PPP Guidance from SBA Administrator Carranza on Accessing Capital for Minority, Underserved, Veteran, and Women-owned Business Concerns (PDF)
- Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act (PDF); and
- Interim Final Rule on Second Draw PPP Loans (PDF).
This is welcome news to the more than 70% of printing and packaging small businesses that were able to continue operations last year in large part due to securing initial PPP loans and those who missed out the first time. As PRINTING United Alliance previously reported, there are several key changes that accompany PPP 2.0. These include:
- Eligibility: Companies with 300 or fewer employees that can demonstrate a loss in excess of 25% of gross receipts in any quarter during 2020 as compared to the same quarter in 2019. Special eligibility is set-aside to support first- and second-time PPP borrowers with 10 or fewer employees, along with small business in economically distressed areas. Additionally, there are set-asides provided for loans made by community lenders.
- Expansion: Expands PPP eligibility to included local newspapers and TV and 501(c)(6) non-profits, including tourism promotion organizations and local chambers of commerce, among other entities. This new eligibility extends to national, state and local industry trade associations that have been a critical information link to member companies regarding government action related to the pandemic.
- Amount: Establishes a maximum loan size of 2.5 times average monthly payroll costs, up to $2 million. Provides the ability for a PPP borrower to request an increase in their first-draw PPP loan amount in the event they returned any or all of their first-draw PPP loan or did not accept the full first-draw PPP loan amount.
- Forgiveness: Borrowers receive full loan forgiveness if they spend at least 60% of their PPP loan on payroll costs over a time period of their choosing between eight to 24 weeks. Removes the requirement that the amount of a borrower’s Economic Injury Disaster Loan (EIDL) Advance Grant be deducted from PPP forgiveness. Provides that forgiven PPP loans will not be included in a borrower’s taxable income, and that deductions are allowed for expenses paid with proceeds of a forgiven PPP loan. This last change was a hard-fought victory for small businesses and one that PRINTING United Alliance lobbied heavily for on Capitol Hill.
- Expenditures: Adds certain allowable and forgivable expenditures, such as: supplier costs on existing contracts and purchase orders, cost for perishable goods at any time, costs relating to worker protective equipment and adaptive costs, and technology operations expenditures. Also allows PPP borrowers to include additional group insurance payments when calculating their PPP payroll costs. This would cover insurance plans like vision, dental, disability and life insurance.
- Simplification: The forgiveness process is simplified for loans of $150,000 or less.
Eligible PRINTING United Alliance members planning to seek PPP funds in 2021 are advised to consult their preferred lending institution for specific details. Additionally, consulting a tax/accounting professional regarding use of funds is advised in order to keep pace with any new guidance that accompanies this legislation and to preserve a company’s eligibility for loan forgiveness.
Lisbeth Lyons is the Vice President, Government and External Affairs, PRINTING United Alliance, having joined Printing Industries in March 2005 as Director of Legislative Affairs. In this position, she is responsible for providing direct advocacy before Congress and the Administration on key industry legislative initiatives, as well as for the strategic direction of the organization's grassroots and external outreach activities. She serves as Treasurer of PrintPAC, the only industry political action committee dedicated solely to electing pro-print lawmakers.
Previously, Lisbeth was Director, Government Affairs at the United States Telecom Association (USTA), representing telecommunications companies ranging from the nation's largest Regional Bell Operating Companies (RBOCs) to small, rural telephone companies. Lisbeth also served as Director of Grassroots & Legislative Services at the National Federation of Independent Business (NFIB), the nation's largest small business advocacy organization.
Lisbeth is a candidate for an M.A. in Political Management at The George Washington University and holds a B.A. from DePauw University in Greencastle, Indiana. Prior to working in Washington, D.C., Lisbeth was a teacher with Chicago Public Schools.