Governor Kelly announces the Federal Paycheck Protection Program Reopens Applications for Forgivable Loans
TOPEKA – With the launch of 2021 Coronavirus relief programs, Governor Kelly today announced Kansans can begin submitting applications to the 2021 Federal Paycheck Protection Program (PPP) for forgivable loans to small businesses.
“Kansas small businesses have been among those hardest hit by COVID-19,” Governor Laura Kelly said. “The Paycheck Protection Program is integral to keeping our state on the path to recovery. This is a good step forward, but we know the need for relief is great – and I will continue to push for additional stimulus funding to support Kansas’ economic recovery.”
Led by the Small Business Administration (SBA) and the Treasury Department, the PPP is a federally administered program providing loans to small businesses to cover payroll expenses. The SBA began accepting applications through Community Financial Institutions on January 11 and through all other financial institutions on January 19, with applications accepted through March 31.
“In the past year, the Paycheck Protection Program offered federal support to tens of thousands of Kansas small businesses, but we understand that the need is still great,” Lieutenant Governor and Commerce Secretary David Toland said. “This program exists to put federal dollars in the hands of small business owners who need them most. I would encourage Kansas small business owners to apply for this program to get more resources as our state continues to grow and recover from this enormous challenge.”
During the 2020 distribution of PPP money, 54,000 small businesses in Kansas received $5 billion in funding. The 2021 PPP aims to make the program more attractive for small businesses and target the worst impacted industries through the following changes:
- Forgiveness has been simplified for borrowers of $150 thousand or less, with self-certification option to attest funds are spent appropriately
- Hospitality businesses, including hotels and restaurants, are eligible for an increased loan total (3.5x monthly payroll)
- Eligible expenses paid for with forgiven PPP loans may now be deducted on taxes for 2020 and 2021 & employers are now eligible for the Employee Retention Tax Credit even after taking PPP funds (reverses earlier guidance from IRS)
- Employers no longer must deduct Economic Injury Disaster Loans from their PPP loan total (EIDL program was refunded with an additional $40B too)
- Additional categories are now eligible as non-payroll expenses (up to 40% of total loan amount), with operational expenses (including software, cloud services, accounting services, etc.), supplier costs, damage from social unrest, and worker protection expenses
- Additional groups are eligible for loans, including 501(c)(6)s, housing cooperatives, and direct marketing organizations
Under the new program, $234 billion are available with $12 billion earmarked for businesses in low-income & minority communities, as well as $15 billion in grants dedicated to live entertainment venues. Through Community Financial Institutions, the SBA hopes to encourage greater access to PPP funds. Businesses that have not received PPP funds previously are eligible for loans up to $10 million if they have 500 or fewer employees. Businesses that received PPP funds during the first round are eligible for up to $2 million in funding if they have 300 or fewer employees.
Information on where and how to apply can be found here.