American Rescue Plan Adds $7.25B in Paycheck Protection Program Funding (UPDATED)
The House of Representatives summary of the Bill clarified eligibility and the clarification is in red below.
After being the focus of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (EAA) of the Consolidated Appropriation Act of 2021 (CAA), the Paycheck Protection Program (PPP) is only a small part of the American Rescue Plan (ARP) that the president signed on March 11. The ARP adds $7.25 billion in additional funding to PPP but does not extend the PPP's current application period or deadline of March 31, 2021.
Further, the ARP expands PPP to allow more not-for-profit entities to be eligible for a PPP loan (both First Draw and Second Draw) in two ways. First, for large not-for profit entities the ARP expends eligibility by removing the SBA’s affiliation rules as to nonprofits and, instead, looks at the employee headcount at the “per physical location” level for both First and Second Draw PPP loans. Second, the ARP makes PPP loans available to other not-for-profit organizations or any 501(c) [with the exception of 501(c)(4) organizations] not previously included in CARES and/or EAA; provided, however, a not-for profit entity added under the ARP is not eligible if:
- it receives 15% of its receipts from lobbying activities,
- lobbying activities comprise more than 15% of activities of the entity
- the cost of lobbying activities exceeds $1M during the most recent tax year that ended prior to February 15, 2020 and
- it employs more than 300 employees.
Finally and in addition, the ARP expands PPP eligibility to internet-only news and periodical publishers with more than one physical location, so long as the business does not have more than 500 employees per physical location or the applicable SBA size standard. Internet-only news or periodical publisher that apply for a PPP loan will be required to certify that they are an Internet-only news or periodical publisher and that the loan will support locally focused or emergency information.
If you are a not-for-profit that is now eligible, you should confirm eligibility, gather documents and proceed with filing for a PPP loan immediately. While the ARP added $7.25 billion in additional funding to PPP (for all eligible borrowers) and expanded eligibility for not-for-profits and internet-only new publishers, the ARP did not extend the PPP's current application period or deadline of March 31, 2021.