--- title: What the New PPP Means for Your Business - Ahola description: The new round of Paycheck Protection Program loans is available to both new and second-time borrowers. Who gets the money? And what are the rules? image: https://blog.ahola.com/hubfs/Imported_Blog_Media/moneyt.jpg --- Start typing and press Enter to search * * # What the New PPP Means for Your Business [Home](https://www.ahola.com/) » [News & Events](https://blog.ahola.com/what-the-new-ppp-means-for-your-business) » What the New PPP Means for Your Business [2021-01-18%2010:39:20](2021-01-18%2010:39:20) ![](https://blog.ahola.com/hubfs/Imported_Blog_Media/moneyt.jpg) ## What the New PPP Means for Your Business By [ aholaadmin ](https://blog.ahola.com/author/aholaadmin)  Posted [ January 18, 2021](2021-01-18%2010:39:20)  In  [Payroll](https://blog.ahola.com/tag/payroll), [Human Resources](https://blog.ahola.com/tag/human-resources), [Managing COVID-19](https://blog.ahola.com/tag/managing-covid-19), [Tax Compliance](https://blog.ahola.com/tag/tax-compliance), [Employees](https://blog.ahola.com/tag/employees), [Hiring](https://blog.ahola.com/tag/hiring) - - - - - Enacted at the end of 2020, the Consolidated Appropriations Act, 2021, allocates $325 billion to small businesses, nonprofits and venues hit hard by the COVID-19 pandemic. Of that amount, approximately $284 billion goes toward the Paycheck Protection Program. The previous round of PPP funding ended earlier in 2020. The rules are complex, but here’s an overview of the key PPP provisions: ### First-draw and second-draw loans The new PPP is open to both first-time and second-time borrowers. Eligible first-draw borrowers include businesses with 500 or fewer employees, sole proprietors, independent contractors and self-employed individuals. Eligible second-draw borrowers must: - Have no more than 300 employees. - Have used or will use all of their initial PPP loan. - Show at least a 25% decline in gross receipts during Q1, Q2, Q3 or Q4 of 2020, comparable to the same quarter in 2019. ### Loan cap The maximum loan amount for each PPP borrower is $2 million, decreasing from $10 million in the previous round. ### Loan usage time frame PPP borrowers must use their loan within eight weeks or 24 weeks, in order to have their loan forgiven. They must choose one or the other. ### Eligible PPP expenses As before, borrowers must allocate at least 60% of their PPP loan toward payroll costs. The new PPP adds the following eligible non-payroll expenses: - Operating costs for human resources and accounting needs — e.g., business software used to carry out those functions. - Worker protection costs — e.g., personal protective equipment. - Property damage costs — e.g., certain damages not covered by insurance. - Supplier costs — e.g., specific goods that are essential to the business’s operations. Borrowers can also include additional group insurance in their payroll cost calculation — such as for life, dental, vision and disability insurance coverage. ### Bankruptcy allowance Unlike before, borrowers who are in Chapter 11 bankruptcy may now qualify for PPP loans. ### Underserved, veteran and minority-owned businesses There are special provisions for underserved, veteran and minority-owned businesses — including those with 10 or fewer employees and those located in low-to-moderate-income neighborhoods. Additionally, the Small Business Administration says that it will take steps to make it easier for these businesses to obtain PPP access. ### More PPP provisions - Simplified loan forgiveness application for borrowers with loans of up to $150,000. These borrowers only need to complete a one-page certification. - Eligible expenses paid with forgiven PPP funds are tax deductible. - Borrowers can take a PPP loan and the Employee Retention Tax Credit, so long as certain conditions are met. - The new PPP extends the ERTC to June 30, 2021, and raises the credit rate from 50% to 70%. Notably, the act reopens the Economic Injury Disaster Loan advance/grant program plus provides grants to shuttered businesses in the arts and culture sector, such as live venues, theaters and museums. The PPP opened to new borrowers on Jan. 11, 2021, and to second-draw borrowers on Jan. 13, 2021. However, not all lending institutions are able to roll it out at the same time; contact your institution for details, and let us know if you have any questions. ### Reply a Comment ## RELATED POSTS [![](https://blog.ahola.com/hubfs/Imported_Blog_Media/gifts.jpg) ](https://blog.ahola.com/planning-for-year-end-bonuses) [Planning for Year-End Bonuses](https://blog.ahola.com/planning-for-year-end-bonuses) [![](https://blog.ahola.com/hubfs/Imported_Blog_Media/pppfa-3.jpg) ](https://blog.ahola.com/view-webinar-paycheck-protection-program-flexibility-act-update) [[View Webinar] Paycheck Protection Program Flexibility Act Update](https://blog.ahola.com/view-webinar-paycheck-protection-program-flexibility-act-update) [![](https://blog.ahola.com/hubfs/Imported_Blog_Media/qtq80-TQJa6H.jpeg) ](https://blog.ahola.com/how-to-encourage-employees-to-embrace-technology) [How to Encourage Employees to Embrace Technology](https://blog.ahola.com/how-to-encourage-employees-to-embrace-technology) ## SUBSCRIBE ### Recent posts - [Professionalizing HR Without Losing Your Family Culture ](https://blog.ahola.com/professionalizing-hr-without-losing-your-family-culture) - [Why Encouraging Employees to Take Summer Vacation Benefits Your Workplace ](https://blog.ahola.com/why-encouraging-employees-to-take-summer-vacation-benefits-your-workplace) - [Ahola Named a 2026 Top Workplace — Six Years Running! ](https://blog.ahola.com/ahola-named-a-2026-top-workplace) - ### Topics - [Affordable Care Act (13)](https://blog.ahola.com/tag/affordable-care-act) - [Benefits (223)](https://blog.ahola.com/tag/benefits) - [Cybersecurity (1)](https://blog.ahola.com/tag/cybersecurity) - [Employee Engagement (255)](https://blog.ahola.com/tag/employee-engagement) - [Employees (603)](https://blog.ahola.com/tag/employees) - [Family Business Insights (10)](https://blog.ahola.com/tag/family-business-insights) - [Hiring (282)](https://blog.ahola.com/tag/hiring) - [Human Resources (645)](https://blog.ahola.com/tag/human-resources) - [Laws/Policies (26)](https://blog.ahola.com/tag/laws-policies) - [Managing COVID-19 (153)](https://blog.ahola.com/tag/managing-covid-19) - [News Release (56)](https://blog.ahola.com/tag/news-release) - [Offboarding (3)](https://blog.ahola.com/tag/offboarding) - [onboarding (7)](https://blog.ahola.com/tag/onboarding) - [Payroll (428)](https://blog.ahola.com/tag/payroll) - [Recruiting (142)](https://blog.ahola.com/tag/recruiting) - [Safety (121)](https://blog.ahola.com/tag/safety) - [Tax Compliance (230)](https://blog.ahola.com/tag/tax-compliance) - [Time & Attendance (124)](https://blog.ahola.com/tag/time-attendance) - [Training & Development (214)](https://blog.ahola.com/tag/training-development) - [Trending Topic (75)](https://blog.ahola.com/tag/trending-topic) - [Uncategorized (1)](https://blog.ahola.com/tag/uncategorized) - [Webinars (69)](https://blog.ahola.com/tag/webinars) - [Workers Comp (1)](https://blog.ahola.com/tag/workers-comp) [see all topics](https://blog.ahola.com/what-the-new-ppp-means-for-your-business#) ### GENERAL DISCLAIMER This blog is for informational and educational purposes only. It does not constitute legal advice, and cannot constitute legal advice, because the authors are not licensed attorneys. Readers should not rely or act upon any information presented on this blog without seeking professional legal counsel. The views expressed in each post are those of the author, and the author alone; they are not the views of Ahola. The information provided in this blog is general, and based on information available as of the date of publishing. Information herein is provided on an “as is” or “as available” basis; we make no warranty of any kind to you regarding the information provided and disclaim any liability for damages from use of the blog or its content. Please consult an attorney to obtain advice with respect to any particular question or issue. 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