Paycheck Protection Program Act Update: Consolidated Appropriations Act, 2021

The Consolidated Appropriations Act, 2021 (the “Act”), which was signed into law on December 27, 2020, includes several updates to the Paycheck Protection Program (the “PPP”) originally established by the Coronavirus Aid, Relief, and Economic Security Act (as modified by the Paycheck Protection Program Flexibility Act of 2020, the “CARES Act”).  The Act appropriates $284,450,000,000 for PPP loans (including second draw PPP loans for prior recipients, as described below), allows for certain prior recipients of PPP loans to apply for and receive up to $2,000,000 in new second draw PPP loans, expands the categories of eligible uses for PPP loans, establishes tax deductibility of expenses paid with PPP loan proceeds, adds flexibility in determining the covered period and streamlines the forgiveness process for PPP loans up to $150,000.  The PPP provides forgivable loans to small businesses administered by the U.S. Small Business Administration (the “SBA”).  For background on the PPP, see our prior PPP alerts at our Coronavirus (COVID-19) Resource Center.

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