On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (Act). The Act allotted an additional $7.25 billion in Paycheck Protection Program (PPP) funding for small businesses. Moreover, nonprofit entities and digital media companies are now allowed to receive funding. Below are key PPP eligibility updates made under the Act and details on the borrower application deadline.
Under the Act, eligible nonprofits now include those employing 500 or fewer employees per physical location (300 or fewer per physical location for second-time PPP borrowers). Such organizations must not receive more than 15% of receipts from lobbying activities. Further, lobbying activities cannot compose more than 15% of the organization’s activities and the organization’s cost of lobbying activities cannot exceed $1 million during the most recent tax year that ended prior to February 15, 2020.
The Act also expands PPP eligibility to digital media companies, including online news and periodical publishers. This is subject to a limitation of no more than 500 employees per physical location or the applicable Small Business Administration size standard.[1] To be eligible, the organization would need to make a good-faith certification that it is an internet-only news or periodical publisher and that the loan will be used to support the production or distribution of locally-focused or emergency information.
Although more small businesses now qualify for PPP funding, the deadline for first- and second-draw PPP loans remains March 31, 2021.[2] The deadline prevents businesses from being approved after March 31, 2021, so if your business needs relief, it is imperative that you connect with a lender as soon as possible.
For information on PPP eligibility, borrower applications, and forgiveness, please contact Christine Fries, the author of this blog, or a member of PilieroMazza’s Government Contracts Group.
[1] The Small Business Administration uses the North American Industry Classification System (NAICS) to determine size standards.
[2] There is bipartisan support in both the House of Representatives and the Senate for an extension of the PPP deadline until May 2021, but currently the deadline remains March 31, 2021.