New Paycheck Protection Program (PPP) guidance from the U.S. Small Business Administration (SBA) incorporates changes to the program made by the American Rescue Plan Act, P.L. 117-2, and establishes that entities that receive a Shuttered Venue Operators Grant (SVOG) cannot subsequently receive a PPP loan.
The American Rescue Plan Act revised the section of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act), P.L. 116-260, that created the SVOG. This change made it possible for entities that receive a first- or second-draw PPP loan after Dec. 27, 2020, to also receive an SVOG, with the proceeds from the PPP loan subtracted from the amount of the SVOG.
In a 26-page interim final rule (IFR) released Thursday afternoon, the SBA codified that change and clarified that if a venue operator receives first- and second-draw loans during the current PPP round and then receives an SVOG, the amount of the SVOG will be reduced by the total of the two PPP loans.
Venue operators and other eligible SVOG applicants do not have to subtract out any PPP funding received before Dec. 27, 2020.
The SBA did rule in the IFR that because the American Rescue Plan Act did not amend certain sections of the Small Business Act, PPP applicants are ineligible for the PPP if they are approved for an SVOG before they receive a PPP loan number.
The rest of the IFR focuses on implementing previously reported PPP changes made by the American Rescue Plan Act, such as expanding eligibility, subject to lobbying limits, to certain not-for-profits listed in Sec. 501(c) of the Internal Revenue Code.
The SVOG was appropriated $16 billion to provide eligible applicants with grants equal to 45% of their gross earned revenue, up to a maximum of $10 million. The SBA said last week that it plans to begin accepting applications for the program in early April.
AICPA experts discuss the latest on the PPP and other small business aid programs during a virtual town hall held every other week. The webcasts, which provide CPE credit, are free to AICPA members and $39.99 for nonmembers. Go to the AICPA Town Hall Series webpage for more information and to register. Recordings of Town Hall events are available to view for free on AICPA TV.
The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.
Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA, CPA.com, and fintech partner Biz2Credit.
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.
— Jeff Drew (Jeff.Drew@aicpa-cima.com) is a JofA senior editor.