Top Things To Know About the Paycheck Protection Program
March 01, 2021
The COVID-19 pandemic took our economy on a roller-coaster ride in 2020, and in 2021 we are still feeling the pains and strains from that ride. The introduction of the Paycheck Protection Program (PPP) in March of 2020 was a lifeline to many small businesses who were struggling due to the pandemic. In late December, Congress tossed another lifeline to small business again with more flexibility in use and some clarifications in hopes to get small businesses back on their feet. Here are a few things you need to know about the PPP.
The COVID-19 pandemic took our economy on a roller-coaster ride in 2020, and in 2021 we are still feeling the pains and strains from that ride. The introduction of the Paycheck Protection Program (PPP) in March of 2020 was a lifeline to many small businesses who were struggling due to the pandemic. In late December, Congress tossed another lifeline to small business again with more flexibility in use and some clarifications in hopes to get small businesses back on their feet. Here are a few things you need to know about the PPP.
New PPP rules regarding business with a NAICS code 72 designation
Small companies in certain sectors have been especially hard-hit by the pandemic. Restaurants have had to temporarily shutter their doors and put strict social distancing measures in place when reopening to prevent the spread of COVID-19. To help businesses with a NAICS code 72 designation, they will calculate their payroll cost at a higher percentage than other businesses. That means they multiply their monthly payroll cost by 3.5% instead of 2.5%
New Rules for getting a Second PPP Forgivable Loan
This allows harder hit businesses, with revenue reductions of at least 25 percent calendar quarter over calendar quarter to apply for another round of PPP funding.
The Economic Relief Act also expanded the use of PPP funds to include new expenses and help hard-hit industries like restaurants. These new expenses, which are also eligible for forgiveness, are:
Personal protective equipment (PPE) and adaptive investments to help small business owners comply with health and safety guidelines; Operations expenditures for payments on software and other items for human resources and accounting needs; Supplier costs that are essential to business operations, including perishable goods; and Property damage caused by public disturbances that are not otherwise covered by insurance.
New allowances for SBDC’s to advise 501c3 Non-Profits
Small Business Development Centers have historically been unable to advise non-profit entities but due to the pandemic, those guidelines have been temporarily modified to allow advising on COVID-19 issues. Therefore ASU’s SBDC can advise local non-profits on COVID-19 related matters including PPP Loans, EIDL Loans, and more.
These are just a few of the changes to the PPP guidelines that are intended to help small businesses stay afloat until the pandemic passes. We here at the ASU SBDC are well versed in these changes and are here to help small businesses in the surrounding area FREE OF CHARGE. To take advantage of these services check out our website at www.angelo.edu/SBDCand download the Business Recovery Guide.
For additional PPP information head to www.SBA.gov
Verify NAICS code status here https://www.census.gov/naics/
“Business Tips” was written by Leslie Mackie, Business Advisor of Angelo State University’s Small Business Development Center. For more information on the topic of this article or the services of the ASU • SBDC, contact her at Leslie.Mackie@angelo.edu.