COVID-19 Relief Law - HEALS Act & PPP Round 2
A second round of Payroll Protection Program ("PPP") loans might be going out to American business owners soon. On July 28, 2020, Senate Majority Leader Mitch McConnell unveiled the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act,which includes another round of PPP loans similar to those distributed as part of the CARES Act earlier this year.
During the initial round of PPP loans, small businesses with up to 500 employees could apply as long as they were able to certify that the reason for their application stemmed from economic uncertainty. Under the new Republican plan, a second round of PPP loans will be made available to struggling businesses, but with a couple of key changes:
- Loans are limited to businesses with 300 employees or fewer; &
- Eligibility hinges on being able to show at least a 50% decline in revenue compared to a previous year's quarter.
If the plan passes, the businesses that do receive PPP loans will also have more flexibility on how to spend the money. Specifically, businesses will be able to use their funds to purchase protective equipment for employees and customers -- which is proposed as a new deductible expense.
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