The $325 billion in funding carved out for all small businesses represents the largest component of the package, more than the funds allocated to direct payment checks and unemployment benefits combined. That includes more than $284 billion for another round of forgivable Payment Protection Program loans.
(See the full bill 5,600-page here. Provisions for PPP and other small business support begin on page 2,042.)
While most PPP borrowers will be eligible for loans worth up to 2.5 times their average monthly payroll costs, hotels and restaurants (or “Sector 72” companies) will be able to borrow up to 3.5 months worth of average payroll costs, up to a maximum of $2 million.
Shuttered venue operators — including theaters, movie theaters and museums — will be eligible for grants worth six months of gross revenue in 2019, up to a maximum of $10 million. Publicly listed companies, those with more than 500 employees, or with operations in more than 10 states or more than 1 country, will not be eligible for such grants.
The revised PPP rules also expand the types of expenses that may be eligible for forgiveness. These now include property damage costs “related to property damage and vandalism or looting due to public disturbances that occurred during 2020.” The funds will include damage not covered by insurance or other forms of compensation.
Covered expenditures now also include operating or capital expenditures that allow a business — restaurants in particular — to comply with sanitation and social distancing requirements issued by government agencies. These include air ventilation or filtration systems, sneeze guards, expansion of outdoor business space, onsite or offsite health screening capability, and personal protective equipment.
As before, borrowers will need to spend at least 60 percent of PPP funds on payroll expenses to be eligible for full forgiveness.
The period over which this rule applies may be either eight or 24 weeks at the borrowers’ discretion, an option that was added as part of July’s Paycheck Protection Program Flexibility Act
The funds set aside for small businesses also include $20 billion for targeted Economic Injury Disaster Loan Grants. There are also dedicated set-asides for PPP lending through community-based lenders like Community Development Financial Institutions and Minority Depository Institutions.
About $525 billion in PPP funds were disbursed to 5.2 million firms through the first two rounds of PPP. About $134 billion in program funds remained unused when the Small Business Administration stopped accepting applications for the second round in August, which has been attributed to borrowers’ confusion and concerns about the program.