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COVID-19 Relief Bill and PPP Update (12/28/20)

As many of you are aware, the Covid-19 Relief Bill was signed into law late last night on 12/27 making it official. As part of the bill, the PPP was also reopened (see below for more details) and some additional money was given to the EIDL program.

Covid-19 Relief Bill

There are numerous items in this bill that may affect you and or your clients. Below are some highlights:

  • Businesses that received PPP loans would be able to take tax deductions for the expenses covered by forgiven loans. This as it may impact tax-related actions at year-end.
  • Extends to 50 weeks the amount of time for which workers may claim benefits through both state and federal programs.
  • Extends until the end of January 2021 a federal eviction prohibition. Landlords and building owners can apply on behalf of tenants meeting the eligibility requirements.
  • The bill also provides funding for a variety of targeted industries including but not limited to Airlines, Farms, Biomedical Research, Movie Theaters, and select Banks.

PPP Update 12.28.20

Much like the program’s first iteration, the aid will be in the form of forgivable loans to small firms, but there will be some key changes on issues such as eligibility for second-time applicants and types of forgivable expenses. This is what we know so far:

  • Existing PPP borrowers may apply for a second loan, provided they have 300 or fewer employees and can demonstrate they experienced a 25% reduction in gross receipts during a quarter in 2020 compared with the same quarter in 2019.
  • First-time PPP borrowers will be subject to the program’s original eligibility rules open to businesses with up to 500 employees, and there was no requirement to demonstrate a revenue loss.
  • The maximum for second-draw loans is $2 million, less than the $10 million cap for PPP’s first round.
  • Second-time PPP borrowers will generally be eligible to borrow an amount equal to 2½ times their average monthly payroll costs.
    • A notable exception: Applicants in the accommodation and food services industries, as designated by the Small Business Administration, are eligible for loans that amount to 3½ times their average monthly payroll.
  • Borrowers are still required to spend at least 60% of the funds on payroll to receive full forgiveness. The other 40% may be used on eligible costs. As before, these costs include certain mortgage expenses, rent, and utility payments. The bill expands forgivable expenses to include expenditures for personal protective equipment and other gear to protect workers; supplier costs; operations expenditures, such as software; and property damage costs due to public disturbances during 2020.
  • Provides a simplified forgiveness process for PPP loans under $150,000. These borrowers will need to complete a one-page certification attesting they complied with program requirements
  • When will the program reopen? The bill requires the SBA to establish regulations on small-business support no later than 10 days after the legislation is signed into law.


  • The legislation provides $15 billion for the SBA to make grants to hard-hit live venue operators, such as theaters and live performing arts organizations.
  • It also provides $20 billion for advance grants for applicants to the SBA’s economic injury disaster loan program (EIDL).
  • Finally, the bill extends a provision that pays the principal and interest on behalf of borrowers that have certain SBA loans, such as 7(a) loan.

If you need assistance with the new and changing guidelines for COVID-19, PPP and EIDL loans, let Optima help.  Our team has helped many clients during the pandemic in 2020.  We are more than ready to help you and your business thrive in 2021.  Call Optima at 858.283.1234.

Taylor Gibson
Optima Office COO & Consulting CFO



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