Cornhusker Economics February 10, 2021
Payroll Protection Program Increases Eligibility
As the COVID-19 pandemic continues to impact businesses across the country, the Small Business Administration (SBA) has issued new guidelines for the Payroll Protection Program (PPP) in 2021. These guidelines increase the eligibility rules for self-employed, sole proprietors and 1099 workers, including agricultural producers, that allow them to apply and access the PPP Loan funds.
The Consolidated Appropriations Act for 2021 was signed into law by President Trump on December 27, 2020. It included the Economic Aid Act to Hard-Hit Small Businesses, Nonprofits and Venues Act (EAA). EAA is a $284 billion expansion of PPP to provide additional forgivable loans for first time PPP borrowers (First Draw Loans) and a second round of funding (Second Draw Loans) for existing borrowers who suffered considerable financial hardship. First and Second Draw Loans may be used to help fund payroll costs, mortgage interest, rent, utilities, COVID-19 related worker protection costs and property damage caused by looting or vandalism during 2020, in addition to other supplier costs. At least 60 percent of the loan needs to be used for payroll costs.
On January 11, the SBA reopened applications for businesses to apply for the PPP Loans. Application deadline for both loan funds is March 31, 2021.