Modifications to Paycheck Protection Program – American Rescue Plan

Mar 12, 2021 | COVID-19 Response, Firm Updates

  • Provides an additional $7.25 Billion into the Paycheck Protection Program (PPP).
  • The new law expanded the eligibility for certain organizations.
    • Non-profit organizations other than those currently eligible to apply for PPP loans.
      • The term additional covered non-profit entity means an organization described in any paragraph of section 501(c) of the Internal Revenue Code of 1986, other than paragraph (3), (4), (6) or (19), and exempt from tax under section 501(a) of the Code, and;
      • Does not include any entity that, if the entity were a business concern, would be described in section 120.110 of title 13, Code of Federal Regulation)
        • Other than those business concerns described in paragraph (a) or (k) of that section.
      • Internet Publishing Organizations are now eligible to receive a covered loan for the continued provision of news, information, content, or emergency information if they employ no more than 500 employees.
      • Businesses with NAICS codes of 519130 are now eligible to receive a covered loan.
    • A nonprofit organization shall be eligible to receive a covered loan if:
      • The nonprofit organization employs not more than 500 employees per physical location of the organization, and;
      • An additional covered nonprofit entity and an organization that shall be eligible to receive a covered loan if the entity or organization employs not more than 300 employees per physical location of the entity or organization.
    • An additional covered nonprofit entity will be eligible to receive a covered loan if:
      • The additional covered non-profit entity does not receive more than 15 percent of its receipts from lobbying activities.
      • The lobbying activities do not comprise more than 15% of the total activities of the organization.
      • The cost of the lobbying activities of the additional covered non-profit entity cannot exceed $1,000,000 during the most recent tax year of the additional covered nonprofit entity that ended prior to February 15, 2020.
      • The additional covered non-profit entity employs not more than 300 employees.