Three big ways small business would benefit from the new Covid relief bill

Given how much the pandemic has hammered small businesses, three big changes to the Paycheck Protection Program are likely to come as a welcome relief.

The Covid relief package passed by Congressearlier this week allocates an additional $284.45 billion in lending to eligible businesses.The bill, which President Trump has not yet signed into law, now makes it possible for a business owner to get a second forgivable PPP loan and imposes fewer restrictions on how the loan may be used. It also relaxes requirements to have small loans forgiven. And it lets businesses deduct the expenses that their PPP loans paid for.Plus, this time, there are special provisions designed specifically to help restaurants and minority-owned businesses.”Christmas came early for small businesses,” said Chris Hurn, founder of Fountainhead, a nonbank lender that makes Small Business Administration-backed loans.Here are some of the keychanges to the PPP loan program:

Businesses may now take a second PPP loan

Businesses that got a PPP loan when the program first went into effect now may apply for a “second draw,” so long as they’re not a public company, don’t employ more than 300 people, have used or will fully use their first PPP loan, and can show at least a 25% drop in gross receipts in the first, second or third quarters of this year compared to the same quarter in 2019.

Specific amounts are earmarked for community development financial institutions — which typically lend to minority-owned businesses in underserved communities — and alsofor businesses with fewer than 10 employees, as well as those in low-income areas.

Most eligible businesses may get a loan equal to 2.5 times average monthly payroll expenses, just as before. But restaurants and lodging businesses may now apply for loans equal to 3.5 times.No loan may exceed $2 million, down from $10 million originally.

Streamlined forgiveness process for loans under $150,000

In order to have a PPP loan forgiven, businesses that borrowed $150,000 or less will simply need to submit a one-page certification that includes the number of employees the business retained as result of the loan, an estimate of how much of the loan was spent on payroll and the total loan amount. Borrowers must also attest that the information is accurate and that theycomplied with loan requirements.

Read more: www.edition.cnn.com