Passed by Congress on Dec. 21, 2020, the Economic Aid to Hard-Hit Small Businesses and Nonprofits and Venues Act, a part of the Continuing Appropriations Act, 2021, covers the incremental $284 billion allocated out of the $900 billion COVID-19 aid package for small businesses.
The focus of this third round of the Paycheck Protection Program is smaller businesses. There will also be a push to get smaller community-based lenders to lead the program. As community-based financial institutions, credit unions should be well positioned to provide these loans to the primary targeted small businesses.
The general parameters call for eligible firms to have 300 or fewer employees and the maximum loan amount that will be considered will be $2 million. This is down from 500 or fewer employees and a maximum loan size of $10 million. The Small Business Administration will be coming out with specific guidance in early January, but it looks like the real focus will be on businesses that have 10 or fewer employees.
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