Who is eligible?

An “eligible recipient” will be defined as “any business concern, nonprofit organization, housing cooperative, veterans organization, Tribal business concern, eligible self-employed individual, sole proprietor, independent contractor, or small agricultural cooperative” that meets the following three requirements:

  1. Employs no more than 300 employees;
  2. Has or will use the full amount of their first PPP loan;
  3. Had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter in 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the same quarter in 2019.

An “eligible recipient” will also still need to satisfy the “Necessity Test” Some may remember that borrowers were required to certify in good faith on their initial PPP loan application that the loan is “necessary to support the ongoing operations of the applicant.” Notably, this “necessity requirement” still appears to be in place following the passage of this Act. The necessity requirement is interesting because it was never fully defined which left many borrowers wondering just how much economic harm had to be inflicted upon their business before they could certify in good faith that the loan was “necessary.”

Maximum Amount of New PPP

For seasonal employers, the maximum amount of new PPP loans is based upon 2.5 times the average monthly payroll costs for the 12-week that begins February 15, 2019 or March 1, 2019 and ends February 15th, 2020. The loan can be for up to, but not exceed, $2 million. For new entities, the maximum amount of new PPP loans is based upon the average monthly payroll costs up through the date when the entity applies multiplied by 2.5, but not exceeding $2 million. For businesses with more than one physical location, the maximum amount of new PPP loans is stated as follows: (I) the total amount of all covered loans shall be not more than $2,000,000; and (II) in applying this paragraph, the Administrator shall substitute ‘not more than 300 employees per physical location’ for the term ‘not more than 500 employees per physical location’ in paragraph (36)(D)(iii).

Chinese Owned Entities Are Ineligible For a Second Draw PPP Loan.