Signed into law on December 27, 2020, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA) includes $284B in new PPP funding for small businesses impacted by the ongoing COVID-19 pandemic. The CRRSAA revises key aspects of the CARES act to provide more flexibility to small businesses, including a new round of PPP funding.
Last updated: January 14, 2021
Businesses are now eligible to receive up to two PPP loans. If you received a PPP loan in 2020, you are eligible to apply for a “second draw loan” under CRRSAA. If you did not receive a PPP loan in 2020, you are also eligible to apply.
Eligibility requirements have changed significantly in the second round of funding. In order to receive funding in the new round of PPP, businesses must meet the following criteria:
- Revenue: Gross receipts must have declined by 25% or more in any quarter of 2020 compared to the same quarter in 2019. Previously, businesses were simply required to state that economic uncertainty made a PPP loan necessary.
- Business size: The business must have fewer than 300 employees. Previously, businesses were permitted to have up to 500 employees.
- Business age: The business must have been operating prior to February 15, 2020.
- Previous funding: The business must have used, or will use, all of its previous PPP funding.
Qualified businesses include corporations, LLCs, sole proprietors, self-employed individuals, and independent contractors.
Funding has been set aside for the smallest businesses (under 10 employees), those in low- and moderate-income areas, as well as for small community banks, credit unions, and community-based lenders to help level the playing field for smaller businesses with greater needs.
Here’s what hasn’t changed:
- Funding amount: Funding is still limited to a maximum of $2M per business and businesses can still access up to their average monthly payroll in 2019 x 2.5.
- Forgiveness: Loans will continue to be forgiven if at least 60% of proceeds are spent on payroll expenses, with a maximum of 40% spent on other qualifying expenses during an 8 or 24 week period. However, more expenses are now eligible for forgiveness.
- Period of use: Loan proceeds can be used over a 24 week period.