On March 11, 2021, President Biden enacted the American Rescue Plan Act (ARPA) which, among other things, makes changes to the Payroll Protection Program. On March 19, the Small Business Administration released new Interim Final Rule on PPP as amended by ARPA to cope with these changes, particularly in the following areas:
- Expand loan eligibility to any 501 (c) organization other than 501 (c) (4).
- Clarify that alternative size standards that allow certain borrowers with more than 500 employees to be eligible for first-draw loans do not apply to second-draw loans. Borrowers who, along with their affiliates, have more than 300 employees are only eligible if they have a NAICS code starting with 72 and have no more than 300 employees per physical location or if it is a news organization or media company that meets certain additional ownership requirements. and has no more than 300 employees per physical location.
- Removal of the restriction on borrowers receiving both a PPP loan after December 27, 2020 and a subsidy for operators of sites closed under the Economic Aid Act (SVO subsidy). Instead, the SVO grant amount will be reduced by the amount of PPP funds borrowed after December 27, 2020. Borrowers cannot receive a PPP loan after being approved for an SVO grant.
- Excluding reimbursable expenses: (a) eligible salaries taken into account in determining the employee retention tax credit (ERTC) under section 2301 of the CARES Act or section 3134 Internal Revenue Code or ARPA Section 393 Disaster Credit and (b) premiums for COBRA Continuing Coverage taken into account in determining Section 6432 credit of the Internal Revenue Code.
The program is currently open until March 31, 2021, but a bill has been passed by the House of Representatives with bipartisan support to extend the loan application deadline to May 31, 2021. With the ongoing changes to the PPP , those who wish to apply should continue to check for updated requirements and guidelines. See our Presentation of the PPP and Loan forgiveness guide for more information.