Client Alert: Congress and the SBA Spread Some Much Needed Holiday Spirit

Over the weekend, Congressional leaders reached an agreement on a $900 billion stimulus package that would send much needed aid to Americans and small businesses still struggling with the impacts of COVID-19. In addition to direct payments to individuals, funds for vaccine distribution and additional monies for local jurisdictions, the new legislation makes many long-awaited changes to the Payroll Protection Program (“PPP”).

Here are the key takeaways:

Deductibility of Forgiven PPP Loans: The IRS has issued alarming guidance in recent weeks that expenses paid for with forgiven loans would not be deductible. However, Congress has clarified their position by allowing deduction of these expenses and excluding loan forgiveness from gross income. This is great news for PPP borrowers and comes just in time for year-end accounting and budgeting.

PPP Round 2: A lot of PPP Borrowers have been hoping for another round of PPP loans and it appears Congress has delivered. Eligibility requirements and maximum loan amounts have been modified slightly from round one and more information will be available as the application window nears.

Simplified Loan Forgiveness: A simplified, one page, forgiveness application will be available for PPP loans up to $150,000 (instead of $50,000).

It is important to note this proposed legislation has not yet been signed into law. Congress is set to vote on the proposal early this week and once approved will be forwarded to President Trump for signature. As always, Brouse McDowell remains a trusted advisor to help navigate the PPP Loan and Forgiveness Process.