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PPP in 2021: A Welcome Return


The third round of PPP relief is here just in time for the new year.

As we enter 2021 and the COVID-19 storm continues to batter the economic state of our country, small businesses across the nation can now grab hold of the latest lifeline extended by Congress in the form of the Paycheck Protection Program (PPP) expansion. The Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, signed into law on December 27, 2020, provides not only additional funding ($284 billion!) but also expanded eligibility, increased flexibility, and simplified forgiveness.

Expanded Eligibility

Many employers who thought they had missed the PPP boat now have a second chance. Businesses with up to 500 employees who were previously eligible for a loan but did not receive one may (re)apply for a first-draw initial loan equal to 2.5 times their average monthly payroll costs, up to $10 million. Businesses who received a PPP loan but are eligible for increased funding under new guidance can apply for additional funding, up to $10 million in total. Businesses with 300 employees or less who experienced a 25% decrease in any quarter in 2020 relative to 2019 can apply for a second-draw loan of 2.5 times their average monthly payroll cost, up to $2 million.

The expanded PPP provisions also extend eligibility to previously excluded businesses, such as non-profits, housing cooperatives, and certain marketing organizations. In addition, a portion of PPP funding is earmarked to specifically target minority-owned businesses.

Increased Flexibility

To provide employers with more wiggle room in their loan and forgiveness applications, there are several newly eligible payroll expenses that can be included in determining payroll costs for both loan and forgiveness applications. These expenses include the employer contributions towards employee vision, dental, disability, and group life insurance. In addition, when applying for forgiveness, newly eligible non-payroll expenses that can be included in the forgiveness calculation include operation expenses, property damage costs due to 2020 riots, supplier costs, and worker protection costs.

Employers with a PPP loan can also now take advantage of another form of COVID relief previously not allowed: the Employee Retention Credit (ERC). Eligible employers affected by COVID-19 can use the ERC to offset their federal payroll tax liabilities. Employers can potentially receive up to $7,000 in tax credits per employee for each of the first and second quarters of 2021. In addition, employers can retroactively claim the ERC for 2020, translating into a potential 2020 credit of $5,000 per employee.

Simplified Forgiveness

As employers work towards loan forgiveness, many will see a much simpler journey than before. PPP loans of less than $150,000 will be eligible for automatic forgiveness via submission of a one-page form. Those who received loans between $150,000 and $2 million will no longer have to submit any documentation along with their application, simplifying a forgiveness application process that was previously quite tedious for many businesses already under tremendous strain.

Owning a small business is never an easy ride, and the COVID-19 pandemic has made it even more difficult to navigate. Small business owners who did not take advantage of the first PPP round may want to take notice this time around. The return of the PPP, with its new look and feel, will be most welcome for many businesses as the nation continues to navigate the COVID-19 pandemic in 2021.

 To find out how Viventium can help, visit to learn about our full suite of COVID-19 Software Solutions.

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