Renewal of Paycheck Protection Program

On December 27, 2020, the Economic Aid Act (the “EAA”) was signed into law.  In addition to providing for small checks to Americans and other things, the EAA renewed the Paycheck Protection Program (the “PPP”) but under different terms. The prior program ran out in August with money left over.  The new law allocates $284.5 billion to the program. The permitted uses have been expanded to include the purchase of essential goods and personal protective equipment. But the eligibility requirements for those borrowing under the new law have been reduced to businesses with less than 300 employees, from 500, and a decline in revenue of at least 25%. The new loans are capped at $2 million rather that $10 million for the old program. There are a number of other tax and other matters handled under the new law. The loans are forgivable if at least 60% has been used for payroll.