COVID-19 Relief and PPP Loan Update

December 22, 2020

On December 21, 2020, the United States House of Representatives and Senate passed legislation to supply the latest round of COVID-19 relief, authorizing more than $900 billion in economic aid to small businesses and consumers. Key components of this legislation expand eligibility for Paycheck Protection Program (PPP) loans and further clarify requirements for forgiveness of outstanding loans. This legislation will now head to President Trump to sign into law. In anticipation of that, we’ve provided some highlights to help you begin understanding what relief options may be available to your business.

  • An additional $284.6 billion in Paycheck Protection Program (PPP) funding for first time and second time borrowers. For second time borrowers to be eligible, they need to have 300 or fewer employees and have sustained a 25% drop in revenue in any quarter of 2020 when compared to the same quarter in 2019. They also must use or have used the full amount of their first PPP loan. Maximum loan amount is 2.5 times their average monthly payroll based on the 2019 calendar year or a one year look back, capped at $2 million.
  • Expanded PPP loan eligibility to include 501(c)(6)s, destination marketing organizations (DMOs), housing cooperatives, newspapers, broadcasters and radio stations.
  • Expansion of eligible expenses to include covered operations (software, cloud computing, and other human resources and accounting needs); property damage costs due to public disturbances that occurred during 2020 that are not covered by insurance; covered supplier costs; and covered worker protection expenditures (PPE).
  • Extended covered period for all first draw loans to March 31, 2021 and is retroactive to the start of the CARES Act. Borrowers may choose the end of their forgiveness covered period between 8 and 24 weeks after the loan origination.
  • A simplified, one-page forgiveness application for PPP loans under $150,000. The form requires the borrower to list the loan amount, the number of employees retained, and the estimated total amount of the loan spent on payroll costs.

Ephrata National Bank will continue to monitor this legislation as it progresses. If you have questions or would like more details on a current or new PPP loan, please call your ENB Relationship Manager or our Customer Service Center at (717) 733-4181. As always, you are also encouraged to seek independent accounting and legal advice on decisions that require such professional reviews and to assist you in determining your priorities.

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