The Health, Economic Assistance, Liability Protection and Schools (HEALS) Act, introduced on July 27 by Senate Republicans, would allow certain small businesses to apply for a second Paycheck Protection Program (PPP) loan. To qualify for a “second draw loan” a business would need to meet more restrictive criteria than those for the original PPP. The business would need to meet applicable SBA size standards, have no greater than 300 employees, and demonstrate a greater than 50 percent reduction in wages. The loan size would be capped at $2 million and could not exceed $10 million when combined with a business’s original PPP loan. Additionally, the HEALS Act would modify the existing PPP loan program by allowing loan proceeds to be used for covered supplier costs, covered worker protection and operating expenses (such as cleaning expenses and PPE purchases to meet federal safety guidelines). The legislation would also include a simplified loan forgiveness process for smaller PPP loans under $150,000 and expand eligibility for PPP loans to 501(c)6 organizations.
If you have any questions about the PPP loan provisions in the HEALS Act, please contact Matthew Turkstra, Director of Tax, Fiscal Affairs, and Accounting at (202) 547-4733, or email@example.com.