It took months of contentious negotiations, but on the evening of December 21, Congress voted to approve a second stimulus package intended as a relief measure for businesses and individuals adversely affected by the COVID-19 pandemic. President Trump signed the bill on Sunday, December 27, 2020.
The $900 billion pandemic relief bill is the second largest federal stimulus after the Coronavirus Aid, Relief, and Economic Security (CARES Act), which was approved in March. Several aid packages under the CARES Act are set to expire December 31 and are now addressed in the new legislation. This new COVID-19 relief bill was combined with a massive $1.4 trillion federal government spending bill that will fund government programs through September 30, 2021.
The legislation includes direct stimulus checks of $600 to individuals and enhanced unemployment benefits, as well as nearly $300 billion of Small Business Administration (SBA) funding for the Paycheck Protection Program (PPP), which stopped taking loan applications in August.
The following summarizes highlights of the stimulus package.
$325 billion in aid is being provided to small businesses, including minority-owned businesses and nonprofits. In particular, the PPP program is being reopened with $284 billion in forgivable loans for small business borrowers, also making it possible for distressed businesses to get a second loan in an effort to remain afloat.
What businesses need to know about this second round of PPP funding:
Additional small business measures include:
Businesses seeking additional PPP loans are advised to immediately prepare by gathering financial data to support their need for more funding.
One of the most contentious issues of the stimulus negotiations, the $160 billion in funding to state and local governments, ultimately was not included in the final bill, as legislators opposing the measure argued that states were given $150 billion to use for COVID-19-related expenses in the first relief package. That said, state and local government leaders will have an additional year to spend the funding.
Do you have questions about the new $900 billion COVID-19 emergency relief bill? Please contact your SVA professional.