By the Numbers: PPP & Other SBA Loan Program Updates– March 29, 2021 by Adam Hill

This blog was updated 3/31/21

Over the course of the COVID-19 pandemic the federal government has implemented various programs to help business owners keep their doors open. Below highlights where four critical sources of funding — Paycheck Protection Program, Economic Injury Disaster Loan Program, Shuttered Venue Operators Grants and Restaurant Revitalization Grants — stand today.

Paycheck Protection Program (PPP)

PPP Extension Act of 2021
President Biden signed into law the PPP Extension Act of 2021, extending the PPP so businesses have through May 31, 2021, to submit their loan application. The extension applies to both first and second draw PPP loans, and the SBA will have until June 30, 2021, to approve applications.
 
First and Second Draw Loans

  • The American Rescue Plan Act of 2021 added $7.25 billion to the PPP, which increased total funding of the program to $291.65 billion.
  • The American Rescue Plan Act also added more nonprofits that qualify, including 501(c)(5) labor and agricultural organizations, and allows those waiting on Shuttered Venue Operators Grants (SVOG) to apply as well. 
  • The SBA has received approximately $204 billion of applications and issued $190 billion in loans to date for 2021 PPP loans. 
  • For Schedule C businesses, the rules have changed to allow for those that have not yet received a PPP loan to apply using gross income versus net income. The limitations under current law still apply, so this affects Schedule C businesses that reported a net loss but have positive gross income. The Schedule C owner PPP loan limit is still $20,833 or $29,166 if you are in certain industries. 

>> Read “$284 Billion Allocated to Paycheck Protection Program Reboot in COVID Relief Package”

Loan Forgiveness

  • For 2020 PPP loans, $186.1 billion have been forgiven (99.7% of loans processed) out of $521.1 billion of loans.
  • Currently, $86.2 billion in PPP loans are in process, $61.8 billion of which are over $1 million. 
  • Loans over $2 million, which have an increased review requirement, have not been moving and the 90-day requirement to process the forgiveness application once received from the lender has been ignored with little to no communication from the SBA. 
  • For loans over $2 million, the SBA, through the lender, will request all supporting documentation not required to be submitted once the SBA has received the application. Please reach out to your Cohen & Company service team to ensure you have the proper documentation necessary to fulfill this request, including support for the necessity certification before filing.
  • The IRS has issued guidance on PPP interaction with the Employee Retention Credit (ERC). Careful planning should be considered before filing your application if you qualify for the ERC.

>> Read “5 Common Questions Businesses Ask About Claiming the Employee Retention Credit”

Economic Injury Disaster Loan program (EIDL)

  • The SBA announced it will be increasing the maximum loan amount to small businesses and nonprofits starting the week of April 6, 2021.
  • Loan limits will increase from six-months of economic injury with a maximum loan amount of $150,000 to up to 24 months of economic injury with a maximum loan amount of $500,000.
  • For loans in place that were subject to the prior limit, the SBA will reach out to you; and for loans in process the updated limit will automatically apply. 
  • The SBA also extended the deferment period on the first payment for 2020 loans to 24 months; all loans made in 2021 will have an 18-month deferred payment start date.

Shuttered Venue Operators Grant Program (SVOG)

  • Created from the Economic Aid Act on December 27, 2020, this program also runs through the SBA.  
  • The program allows qualifying businesses to receive grants for 45% of their gross earned revenue up to $10 million. 
  • The SBA will start accepting applications April 8, 2021.
  • The American Rescue Plan Act added $1.25 billion to the $15 billion that was already funded. 
  • Those holding out for this program can now apply for a PPP loan due to the delayed April start of the SVOG.

Restaurant Revitalization Grants

  • This $28.6 billion new program was established through the American Rescue Plan Act and will be administered by the SBA, similar to the SVOG Program.
  • The SBA is working to get this program started and more information should be released in the next few weeks. 
  • There will be a 21-day window where the SBA will be prioritizing applications from restaurant owned and operated or controlled by women, veterans, or socially and economically disadvantaged individuals. 
  • Eligible entities include restaurants, food trucks, food stands, food carts, caterers, saloons, inns, taverns, bars, lounges, brewpubs, tasting rooms and taprooms. Eligible entities must have fewer than 20 locations, may not have received a grant under the SVOG Program and cannot be a public company.
  • Grants are limited to $5 million per physical location and cannot exceed $10 million in total for eligible entities and affiliates.
  • Grant funds can be used to pay almost all operating expenses, including payroll costs, principal and interest on mortgages, rent payments, utilities, maintenance, construction related to accommodating outdoor seating and walls, deck surfaces, furniture, fixtures and equipment, supplies including PPE and cleaning materials, food and beverage expenses, covered supplier costs, operational expenses and any other expenses the SBA determines to be essential to maintain the eligible business. 
  • These grants are nontaxable, and expenses will be deductible, similar to PPP forgiveness. 


Contact Adam Hill at ahill@cohencpa.com or a member of your service team to discuss this topic further.


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Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.