Many employers (especially with the help of HR providers like MP) have been benefitting from PPP loans over the last year or so. The American Rescue Plan Act (ARPA) recently expanded and extended the program so that even more employers can take advantage of it.
Employers who have HR services (like MP’s) should reach out to them ASAP to discuss if the new options for PPP funds might be right for their organization. MP has helped hundreds of clients apply for PPP loans, use the best HR strategies to plan their spending and stay in compliance with PPP guidelines, then apply for (and obtain) full forgiveness.
Here are 3 key ways the program has been changed:
- The deadline has been extended to apply for PPP loans: Instead of March 31st, the program will now be open until May 31st, 2021. Since the application process can be little complicated depending on the lender, thus taking some time, this extension will be immensely beneficial to employers. Employers will also be busy working with their payroll providers and CPAs to handle their especially complex 2020 taxes right now. Receiving more time to apply for PPP loans after the tax deadline will be very beneficial.
- Additional funding has been added for PPP loans: In December 2020, an additional $284 billion was added to the funding for PPP loans. As of early March 2021, an additional $7.25 billion was added specifically for initial second draw loans. These extra funds will be imperative because, as explained below in change number three, more employers will be eligible to apply for PPP loans.
- Eligibility has been expanded: One of the most important HR updates on PPP loans is that more employers who were not eligible previously can now apply for the program. Four new categories have been added to the list of eligible employers.
- Digital media companies that:
- Employ 50 people or less per physical location
- Can certify that they are an internet-only news or periodical publisher
- Can include good-faith certification that the proceeds of the loan will cover expenses related to its work to spread local or regional news
- Large nonprofits with multiple locations (with no more than 500 employees per physical location)
- Section 501(c)(5) labor organizations, 501(c)(7) social and recreational clubs, and 501(c)(8) fraternal benefit societies can receive PPP loans
- Additional covered nonprofit entities: a nonprofit other than 501(c)(3),(4),(6), and (19) that:
- Doesn’t receive more than 15% of its gross receipts from lobbying activities
- Lobbying activities are not more than 15% of the total activities of the organization and the cost of lobbing activities doesn’t exceed $1 million during the most recent tax year ending prior to February 15, 2020
- Doesn’t employ more than 300 staff
- Digital media companies that:
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