Long-Awaited COVID-19 Relief Financing Programs Announced
By Colin McEvoy on January 12, 2021
The Paycheck Protection Program (PPP) has been reinstated, and several other financing programs have been restored or introduced to provide emergency loans to small businesses and non-profit organizations seeking to maintain workers and cover costs during the COVID-19 crisis.
The PPP, which previously provided emergency COVID-19 grants to multiple Lehigh Valley companies, has been reinstated effective Jan. 11. 501(c)(6) organizations are also now eligible for PPP loans under the updated program, and some of the funding has been designated specifically for underserved businesses, such as woman-owned and minority-owned businesses.
The U.S. Small Business Administration (SBA) is also accepting applications for Economic Injury Disaster Loans (EIDL), which includes loans and grants. Available through all of 2021, the EIDL loans provide up to $2 million in financial assistance for small businesses experiencing a temporary loss of revenue. Grants are available offering up to $1,000 per employee, with a maximum of $10,000.
The SBA also announced a new program called Save Our Stages!, which authorizes $15 billion for grants to eligible live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theater operators, or talent representatives who demonstrate a 25% reduction in revenues. More information will be announced soon.
Other recently extended or updated with more attractive terms financing programs available for small businesses include the SBA Express Bridge Loan Pilot Program; debt relief for Section 7(a), 504 and Microloans; the extension of the Employee Retention Tax Credit, and an extended deferral of social security tax payments.
Information about all these and other federal, state, and local assistance programs can be found on the Lehigh Valley Economic Development Corporation website at lehighvalley.org/covid19 and lehighvalley.org/financing. LVEDC is dedicated to providing information to regional companies about financing programs and other resources available during the COVID-19 crisis.
Eligible businesses and organizations may apply for PPP loans through March 31. Loan eligibility has been expanded from the first PPP loan cycle, according to SBA and the U.S. Treasury Department. Visit here for more information on how to apply.
The loans, which are available for both new borrowers and certain existing PPP borrowers, may be forgiven if businesses meet PPP employee retention criteria and use the funds they receive for eligible expenses.
This round of the PPP continues to prioritize millions of Americans employed by small businesses, according to SBA Administrator Jovita Carranza. In total, an additional $284 billion has been allocated for PPP loans to small businesses.
“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” Carranza said. “Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.”
The PPP previously provided 5.2 million loans worth $525 billion to American small businesses, supporting more than 51 million jobs, according to U.S. Treasury Secretary Steven T. Mnuchin.
“This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19,” Mnuchin said. “We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers.”
Key updates to the PPP program, according to SBA, include:
- PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
- PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
- The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;
- The PPP provides greater flexibility for seasonal employees;
- Certain existing PPP borrowers are now eligible to apply for a second PPP Loan
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