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Breaking Down the $900 Billion Stimulus Package (Second Draw PPP)

On December 21, 2020, a new bill was designed to provide $900 billion in COVID-related aid - part of which is meant to help businesses in the USA. In totality, the bill is expected to provide funding for unemployment benefits, small businesses, stimulus checks, vaccine distribution, transportation, USPS, and even rent assistance.

Out of the $900 billion, $325 billion (approx.) has been set aside for the Small Business Administration (SBA) to aid American businesses that have been affected by the “pandemic”. This amount is allocated towards the Paycheck Protection Program (PPP), independent live-venue operators affected by the virus, and small business grants. Specifically:

  • $284 billion for the PPP

  • $15 billion for the live-venue operators, and

  • $20 billion towards the grants.

The PPP, if you’ve never heard of it before, is an extremely helpful program (particularly right now) that provides forgivable loans to eligible small businesses. Under the stimulus bill, if your firm has already received a PPP loan in the past, you may still be able to receive a second PPP loan. To be eligible for another PPP loan, your small business must have less than 300 employees, and have suffered a loss of at least 25%-30% of revenue in any quarter of 2020 in comparison to 2019 or previous quarters. Furthermore, a small 501(c)(6) organization with less than 150 employees and no history of lobbying, can also receive a PPP loan under this new bill. The rundown of who’s eligible and who’s not is listed here.

The specifics of what the new bill can accomplish under the PPP is as follows:

  • Eligible expenses for loan forgiveness are expanded to include supplier costs and investment costs related to renovating layouts/facilities and obtaining personal protective equipment according to currently mandated safety protocols.

  • The loan forgiveness process is simplified for businesses that have borrowed less than $150,000 in PPP loans.

  • Business expenses that are paid for using PPP loan funds are confirmed to be tax deductible.

Obviously, obtaining a PPP loan for your small business is one of the financial protections available to ensure that business carries on as usual. To financially protect the health of your staff, group health insurance is to your employees what a PPP loan is to your business. Consider discussing your options with the insurance experts at NY Small Health.

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