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On Dec. 27, 2020, a new $900 billion Covid relief bill, the Consolidated Appropriations Act of 2021, was signed into law to provide more than $300 billion in aid for small businesses. The most significant provision of the act is the funding of the Paycheck Protection Program (PPP), for $284 billion.
Now that the PPP is back, it gives the hard-est-hit businesses the opportunity to obtain a second loan. If no PPP loan was obtained during the first round, this is a new opportunity to take advantage of this program. The new round of PPP loans opened to all participating lenders on Jan. 19, 2021 and will be open until March 31, 2021, commented Marta Rodríguez, Senior Advisory Manager for leading accounting and advisory firm Kevane Grant Thornton.
The new PPP round will be available to first-time qualified borrowers (PPP 1.0) and to businesses that previously received a PPP loan (PPP 2.0). PPP 1.0 borrowers will be subject to the pro-gram’s original eligibility rules. The original PPP was generally available to businesses with up to 500 employees that certified that “current economic uncertainty makes this loan request necessary” to support their continuing operations.
Previous PPP recipients may apply for up to $2 million with PPP 2.0 if they meet the following three requirements:
The bill allows borrowers that returned all or part of a previous PPP loan to reapply for a second-round loan.
The new bill includes provisions that simplify the loan forgiveness process for loans under $150,000, and details additional eligible costs that can now be included in the loan forgiveness calculation. These changes also apply to borrowers who have not yet applied for forgiveness for their original PPP loan. Borrowers should watch for updates to the guidance since normally programs that are rolled out this quickly may be subsequently amended.
The loan application and the subsequent forgiveness calculation can be a complicated process since there are many factors to consider, such as reduction in number of employees and salaries, and limits in qualifying expenses. The assistance of a qualified accounting professional is key to understanding the guidance. This is where a CPA’s knowledge and judgement can make all the difference, commented Rodríguez, who is a CPA and Certified Valuation Analyst (CVA).
Press Release
New Covid-19 Relief Bill for Businesses and Nonprofits
18 Feb 2021
Caribbean Business - Special Feature
On Dec. 27, 2020, a new $900 billion Covid relief bill, the Consolidated Appropriations Act of 2021, was signed into law to provide more than $300 billion in aid for small businesses. The most significant provision of the act is the funding of the Paycheck Protection Program (PPP), for $284 billion.
Now that the PPP is back, it gives the hard-est-hit businesses the opportunity to obtain a second loan. If no PPP loan was obtained during the first round, this is a new opportunity to take advantage of this program. The new round of PPP loans opened to all participating lenders on Jan. 19, 2021 and will be open until March 31, 2021, commented Marta Rodríguez, Senior Advisory Manager for leading accounting and advisory firm Kevane Grant Thornton.
PPP eligibility
The new PPP round will be available to first-time qualified borrowers (PPP 1.0) and to businesses that previously received a PPP loan (PPP 2.0). PPP 1.0 borrowers will be subject to the pro-gram’s original eligibility rules. The original PPP was generally available to businesses with up to 500 employees that certified that “current economic uncertainty makes this loan request necessary” to support their continuing operations.
Previous PPP recipients may apply for up to $2 million with PPP 2.0 if they meet the following three requirements:
The bill allows borrowers that returned all or part of a previous PPP loan to reapply for a second-round loan.
PP Loan Forgiveness
The new bill includes provisions that simplify the loan forgiveness process for loans under $150,000, and details additional eligible costs that can now be included in the loan forgiveness calculation. These changes also apply to borrowers who have not yet applied for forgiveness for their original PPP loan. Borrowers should watch for updates to the guidance since normally programs that are rolled out this quickly may be subsequently amended.
The loan application and the subsequent forgiveness calculation can be a complicated process since there are many factors to consider, such as reduction in number of employees and salaries, and limits in qualifying expenses. The assistance of a qualified accounting professional is key to understanding the guidance. This is where a CPA’s knowledge and judgement can make all the difference, commented Rodríguez, who is a CPA and Certified Valuation Analyst (CVA).
Tax matters and changes in the bill:
At Kevane Grant Thornton, we are committed to keeping you updated of any developments that may affect the way you do business in Puerto Rico. Please contact us for assistance in relation to this or any other matter, we will be glad to assist you.
Experts / Authors
Marta E. Rodríguez
Marta is the partner head of advisory with over twenty years of experience in public accounting.
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