Last spring, shortly after the onset of COVID-19, the Coronavirus Aid Relief and Economic Security Act (CARES Act) was signed into law. Under the CARES Act, the Paycheck Protection Program (PPP) was established. The U.S. Small Business Administration offers PPP loans to help keep the small business workforce employed during this health crisis.
According to data released by the Treasury Department, 5,100 title and settlement companies received funds from the PPP in 2020. With these funds, more than 51,000 title industry jobs were saved.
As the pandemic carries on, lawmakers continue to address the needs of businesses across the nation. This week, the U.S. Small Business Administration and the U.S. Treasury Department re-opened the PPP for new borrowers and eligible existing PPP borrowers.
This new round of the PPP authorizes up to $284 billion towards the job retention of Americans employed by small businesses and defined other expenses through March 31, 2021. Existing PPP borrowers can also apply for a Second Draw PPP Loan if eligible.
PPP UPDATES EFFECTIVE JANUARY 11, 2021
According to the U.S. Small Business Administration, the PPP updates include the following:
- Borrowers can set their PPP loan’s coverage period between 8 and 24 weeks depending on their business needs
- PPP loans cover additional expenses including operations expenditures, property damage costs, supplier costs, and worker protection expenses
- Eligibility to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of businesses
- greater flexibility for seasonal employees
- Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount
- Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan
SECOND DRAW PPP LOAN ELIGIBILITY
Generally, a borrower is eligible for a Second Draw PPP Loan if the borrower:
- Received a First Draw PPP Loan and used the full amount only for authorized use
- Has no more than 300 employees
- Can show at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
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