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ARTICLE · 26 FEBRUARY 2021

SBA's Paycheck Protection Program (PPP) Resumes

Shipman & Goodwin LLP
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On December 27, 2020, the Consolidated Appropriations Act, 2021, was signed into law, which revitalized the Paycheck Protection Program, an economic stimulus program that began under the CARES Act of 2020.

United StatesConsumer Protection
Julie C. Fay
Julie C. Fay
Tyler J. Bischoff
Tyler J. Bischoff
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On December 27, 2020, the Consolidated Appropriations Act, 2021, was signed into law, which revitalized the Paycheck Protection Program (PPP), an economic stimulus program that began under the CARES Act of 2020. The PPP is a loan program designed to provide a direct incentive for qualifying small businesses, including certain non-profits, to keep their workers on payroll. PPP borrowers are eligible for loan forgiveness if the funds are used for eligible qualifying costs.

Although this new round of the PPP is largely similar to the original program, there are some important changes.  Most notably, given that this is the second round of the PPP, the new law makes a distinction between "First Draw" PPP loans for first-time program recipients (and some entities who previously applied for a loan but returned some or all of it) and "Second Draw" PPP loans for businesses who have previously received a PPP loan.  Different rules apply to each.

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