Economic Aid to Hard-Hit Small Businesses, Nonprofit and Venues Act
Business Law Articles
By Robert J. Waine, Esquire
Rothman Gordon
Pittsburgh, Pennsylvania
On December 27, 2020, the President signed into law the Consolidated Appropriations Act, 2021, which included the Economic Aid to Hard-Hit Small Businesses, Nonprofit and Venues Act (the “Economic Aid Act”). Among other things, the Economic Aid Act authorized $284.5 billion in additional funding for the Payroll Protection Program (“PPP”), established Second Draw PPP loans for entities that received “First Draw” PPP loans, amended the uses to which loan funds can be applied and still be eligible for loan forgiveness, and clarifies the deductibility for tax purposes business expenses that were paid for with PPP loan proceeds.
Under the Economic Aid Act, eligible small businesses can still apply for a First Draw PPP loan until March 31, 2021. In addition, existing PPP borrowers that did not receive loan forgiveness by December 27, 2020, may reapply for a First Draw PPP loan if they previously returned some or all of their First Draw PPP loan funds, or under certain circumstances, request to modify their First Draw PPP loan amount if they did not accept the full amount for which they were eligible. Circumstances that could give rise to being eligible for increased loan amounts include changes in the guidance regarding PPP loans issued by the government.