While the first round of the Paycheck Protection Program (PPP) provided a much-needed economic boost for businesses hit hard by the COVID-19 pandemic, many companies that received a loan have continued to struggle to stay afloat. At last, however, some of the hardest-hit industries now have a chance at survival due to the many improvements Congress built into the second round of PPP loans, which are now underway.
Under the new provision, businesses that missed securing a loan during the first round now have a second chance, providing them with the opportunity to obtain a “first draw” loan, which is subject to the original program rules. “Second draw” PPP loans, which are those that are granted to repeat borrowers, come with new eligibility requirements, including:
• Companies can have no more than 300 employees, compared to 500 in the first round; and
• Businesses must prove a reduction in gross receipts of 25 percent or more for any calendar quarter in 2020, compared to the same calendar quarter in 2019.
In a recently published op-ed in the Atlanta Journal-Constitution, Bennett Thrasher’s Stephen Klein, Partner and leader of the firm’s Bankruptcy & Restructuring practice, and Tim Oberst, Partner in the firm’s Tax practice, shared their insight on the second round of the PPP loan process and how it will impact and benefit companies in Georgia.
To read more about the program as well as other provisions that are providing support to struggling businesses during this time, read Oberst and Klein’s full article here.