The Latest on Federal Relief for US Businesses
Over the weekend, the United States Senate passed a negotiated version of President Biden's $1.9 trillion dollar American Rescue Plan Act. The House of Representatives is expected to soon follow suit, with the bill likely being signed into law sometime later this week.
For those small business owners and managers who may be wondering: this latest relief package does not include any additional rounds of Paycheck Protection Program (PPP) funding, though it does make a small number of firms newly eligible for the first time.
According to data from the Small Business Administration (SBA), over five million small businesses received a PPP loan at some point in 2020. The SBA reportedly processed more applications in the first 14 days of the program last spring than it had in the 14 years prior.
Then, in December, Congress and President Trump committed additional funds to the program, and reauthorized some small businesses to apply for a second "draw" of funding. Lending restarted in early January, but eligibility has since been limited to qualifying businesses who did not receive a PPP loan last year, and those able to demonstrate a year-over-year drop of 25% or greater in at least one quarter of 2020.
Borrowers are still required to spend a certain percentage of their loan proceeds on qualifying operating expenditures, such as payroll and benefits expenses, in order to be eligible for having the loan later forgiven under the program. However, the December relief bill expanded this definition to include "any business software or cloud computing service facilitating business operations, product or service delivery, human resources and other expenses."
If your business is among those presently participating in PPP, or is considering applying before the March 31st deadline, let's discuss how you may be able to have critical investments in your organization's cloud data infrastructure effectively financed or subsidized under these new guidelines.
Until next time, thanks for reading.
For education and research purposes only. This content does not constitute legal, financial, or tax advice. Consult with your financial advisor or tax law professional prior to acting on any information or commentary presented here.