In search of pandemic relief? Breaking down the new Payroll Protection Plan

RALEIGH – Billions from the federal governmen in new funding is available for businesses and other organizations through new COVID-19 relief legislation signed into law over the weekend by President Trump. But there are many changes from the CARES Act package passed earlier in the year, epecially in the Payroll Protection Plan.

Some $284 billion is available.

North Carolina businesses received some $12 billion under the original PPP plan.

“The Act changes PPP primarily in three ways,” says Thomas Zamadics, Jr., an attorney at North Carolina-based law firm Ward and Smith.

“First, the Act allows new PPP loan applications to be submitted by eligible applicants that never obtained a PPP loan.

“Second, the Act permits some businesses that have already obtained a PPP loan to obtain a second PPP loan, called a ‘PPP second draw.’

“Third, the Act changes PPP rules—for existing PPP loans, new PPP loans, and PPP second draws—in the areas of eligibility, allowable expenses, forgiveness, and more. Whether you already have an existing PPP loan, are interested in obtaining a PPP loan, or want to obtain a PPP second draw, the Act makes changes to PPP rules that may be relevant to you.”

His full analysis can be read at this link.

Inside the new PPP program: How it differs, what changes mean, who can apply, much more

Also providing an in-depth look at this new program at the request of WRAL TechWire is Peter Gwaltney, CEO of the North Carolina Bankers Association.

Among key points are:

Re-opens the PPP for first time recipients, with an expansion of eligible entities including 501(c)(6)s, destination marketing organizations (DMOs), housing cooperatives, newspapers, broadcasters, and radio stations. Prohibits publicly traded companies from receiving PPP funds as well as those entities receiving a Shuttered Venue Operator Grants. Clarifies that a business must have been in operation on February 15, 2020.
Set asides of $15 billion for CDFIs and MDIs, $15 billion for depository institutions under $10 billion in assets. [CDFIs are Community Development Financial Institutions. Minority Depository Institutions (MDIs) include banks and credit unions owned by people of color.]
$35 billion for first-time borrowers of which $15 billion for borrowers with 10 employees or fewer or loans less than $250,000 for low-income areas.
Expands list of eligible expenses to include covered operations (software, cloud computing, and other human resources and accounting needs); property damage costs due to public disturbances that occurred during 2020 that are not covered by insurance; covered supplier costs; and covered worker protection expenditures (PPE).

There’s much, much more. The full breakdown is available at this link.