Consolidated Appropriations Act Of 2021: Updates To Paycheck Protection Program

On December 27, 2020, President Trump signed into law Congress's spending bill, the Consolidated Appropriations Act (CAA), 2021, which included the Additional Coronavirus Response and Relief (ACRR) provisions that modified the Small Business Administration's (SBA) Paycheck Protection Program (PPP). The PPP, a loan program designed to provide a direct incentive to businesses to retain their employees, was enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. PPP borrowers are eligible for loan forgiveness if the funds are used for eligible payroll and non-payroll costs.

The ACRR provisions extended the covered period for all new PPP loans through March 31, 2021, and required the SBA to publish additional implementing guidance. On January 7, 2021, the SBA released two interim final rules (which we will cover in a forthcoming article) providing guidance on the PPP extension and expansion and on the new PPP second draw loans.