UPDATE 12.28.20: Congress passed legislation Dec. 21, 2020 that was signed by the president Dec. 27 that provides an additional $284 billion for a new round of forgivable Payroll Protection Program loans, now expanded to include nonprofits, local newspapers, and TV and radio broadcasters.
It also sets aside $12 billion for minority-owned and very small businesses that had trouble accessing the first round of PPP funding.
The new round of PPP loans will be limited to companies with no more than 300 employees and loans will be capped at $2 million. Publicly traded businesses are not eligible.
Small businesses that previously received a PPP loan will be eligible for a second loan if their revenues fell by 25% this year.
PPP borrowers will also be allowed to take tax deductions for covered business expenses, including rent and utilities.
Paycheck Protection Program loan forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
There are two application forms: one for standard loans and a streamlined form for loans of $50,000 or less.
The following loan forgiveness forms and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
• Options for borrowers to calculate payroll costs using an "alternative payroll covered period" that aligns with borrowers' regular payroll cycles
• Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
• Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
• Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
• Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined