Paycheck Protection Program – Revived, Revitalized, and Revamped

On December 21, 2020, Congress approved H.R. 133, also referred to as the Consolidated Appropriations Act, 2021. This Act, signed into law on December 27, included an expansion and amendment to the Paycheck Protection Program Loans (“PPP Loans”) originally provided in the CARES Act within Title III, the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (“Hard Hit Act”). The overall changes impact both new and existing borrowers. Over the next couple weeks, the Small Business Administration (“SBA”) is expected to release guidance that will address implementation questions and change details.

Who is no longer eligible for PPP Loans?

The Hard Hit Act PPP Loan extension expressly excludes publicly traded companies, businesses that were not in operation on February 15, 2020, and businesses that receive a shuttered venue operator grant from those businesses eligible to receive a covered loan.

Who is newly eligible for PPP Loans?

In addition to the remaining eligible small businesses from the CARES Act, the Hard Hit Act adds housing cooperatives, destination marketing organizations, some 501(c)(6) organizations, and some individual stations, newspapers, and public broadcasting organizations.

Are there any changes to how I can use the Loan?

The Hard Hit Act expands the allowed uses for PPP Loan proceeds. Businesses can now also use proceeds for covered operations expenditures, property damages costs, supplier costs, and worker protection expenditures. Also, covered payroll costs now include group life, disability, vision, and dental insurance benefits. No PPP Loan proceeds may be used for lobbying activities.

Can I increase the amount of my existing PPP Loan?

Yes, borrowers that have not yet received forgiveness and returned all or part of their loan or did not take the full amount can request a modification for the difference.

Can my PPP Loan still be forgiven?

Yes, also for borrowers with a PPP Loan of $150,000 or less will now have a simplified loan forgiveness process. For these borrowers, to apply for forgiveness, they will only need to:

Sign and submit a certification including the number of employees they were able to retain because of the covered loan; an estimated amount of the loan spent on payroll costs; and the total loan value;
Attest the certification is accurate; and
Retain records to prove compliance with loan requirements for four years (employment records) or three years (all other records) from the date of the certification.

The simplified forgiveness application should become available on January 20.

The simplified forgiveness application is now available and can be accessed here for qualifying borrowers.

Has any other part of the PPP Loan changed?

Yes, borrowers will now have the option of choosing to disclose demographic information while applying for PPP Loans and forgiveness.

In early February, the SBA will release a Forgiveness Audit Plan, which will outline the metrics the SBA will use to determine which covered loans they will audit.

Additionally, borrowers must now disclose if certain “covered individuals” (i.e., the President, Vice President, head of an Executive Department, member of Congress, or any of their spouses) hold a 20% or more interest in the borrower. No new loans will be issued to a business for which such an interest exists.

If you have any questions regarding the recent Hard Hit Act or your business’s relief options, the attorneys at Sulloway & Hollis are here to assist. Our Business Practice Group provides comprehensive counseling and legal services to employers across New England.

For more information on the Hard Hit Act see our other articles on