Hamburger icon

Menu

  • Business insurance

    • Business Insurance FAQs

    By Business

  • Certificate of Insurance
  • Claims
  • Resources

  • Help
Telephone iconCall Us(844) 654-7272
Our opening hours
NEWS

Small Business Support: What to Expect from the New Stimulus Package

3-minute read

Mariah Bliss

Mariah Bliss

4 January 2021

Facebook iconTwitter iconLinkedIn icon

After much debating, Congress finally passed a new COVID-19 stimulus package, which President Trump signed into law on December 27.

The new stimulus package — estimated to pump approximately $900 billion into a sluggish American economy — represents some lessons learned, as it aims to provide small business support, which wasn’t made available in the first round of funding back in March.

So what exactly is in the new stimulus package? And what does it mean for small business owners like you?

5 Stimulus Updates for Small Business Owners

1. There’s a new — and much more simple — PPP loan.

One of the biggest complaints around the Paycheck Protection Program was that it was difficult to apply for. Additionally, definitions of what constitutes a “small business” were loose, meaning many larger companies took funding that threw the PPP’s purpose into chaos.

The new stimulus package includes a second PPP loan that aims to get funding where it needs to go. This PPP loan is designed for:

  • Businesses with fewer than 300 employees; and
  • Businesses that suffered a drop in revenue of more than 25% in any quarter from 2019 through 2020.

Most small businesses can apply for loans of up to 2.5 times their monthly payroll (based on any month in 2019). However, any food industry business can apply for 3.5 times its monthly payroll.

The SBA has just released the application for the second PPP loan, which you can download here. If you need guidance on the process, check out our advice on how to apply for an SBA loan.

Important note: Depending on the amount you'll be applying for, you may need to show proof of business insurance coverage to get approved for a PPP loan. Contact your SBA lender to learn more about their insurance requirements.

2. The PPP application is much more simplified.

Say goodbye to complicated applications: If you’re applying for a PPP loan under $150K, you’ll only need to complete just a one-page application that contains the following information:

  • The number of employees you’ll retain with the loan funding
  • How much of the loan will be spent on payroll costs
  • An agreement that you’ll retain records for the duration of your loan

3. PPP and Economic Disaster Loan funds are tax-deductible.

Good news for those who used the first stimulus’s small business support to fund their business: Payments made with PPP or Economic Disaster funds are considered tax-deductible. That’s welcome news for you (and your accountant!) as we approach the 2020 tax season.

4. You can pay additional expenses with your PPP funding.

The first PPP loan was limited in terms of how you could use the funding (basically, you could cover only payroll expenses). This new round of funding opens up additional expenses you can pay for with your PPP loan, including:

  • Software that helps you maintain your business operations, like payroll software, payment processing, inventory tracking, and more

  • Property damage costs that were incurred as a result of public demonstrations in 2020 (such as vandalism, broken windows, etc.)

  • Supplier expenses, especially if those costs are considered necessary to running your business

  • Costs incurred as a result of keeping your business compliant with COVID restrictions (such as air purifiers, masks for employees, sanitizers, etc.)

5. Specific funding is set aside for minority-owned businesses.

The new stimulus package sets aside $3 billion in grant funding for minority-owned businesses in underserved communities. This funding aims to address the criticism that the first stimulus package didn’t do enough to get funding to the communities with the greatest needs.

Details are still being hammered out on how this funding will be distributed; we’ll provide updates when those details become available.

More Small Business Support Is Needed

One thing we all can agree on is: as the pandemic continues, more small business support will be needed to help prevent massive closures.

With the incoming administration vowing to continue providing support for small businesses, we’ll keep you updated with any news on what will be done in 2021.

Get Insured in Under 10 Minutes

Get an affordable & customized policy in just minutes. So you can get back to what matters: Your business.

Start Here >
Mariah Bliss

Written by

Mariah Bliss

I love writing about the small business experience because I happen to be a small business owner - I've had a freelance copywriting business for over 10 years. In addition to that, I also head up the content strategy here at Simply Business. Reach out if you have a great idea for an article or just want to say hi!

This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer

Find this article useful? Spread the word.

Facebook icon
Share
Twitter icon
Tweet
LinkedIn icon
Post

People also liked

Insurance

Business InsuranceGeneral Liability InsuranceContractors InsuranceCleaners InsuranceHandyman InsuranceHome Improvement Contractor InsuranceJanitorial InsuranceLandscaping InsuranceLawn Care InsurancePainters InsurancePhotographers InsurancePlumbing Contractors InsuranceSelf-Employed Insurance

Address

Simply Business1 Beacon Street, 15th FloorBoston, MA02108

Legal

Terms & ConditionsPrivacy PolicyResponsible Disclosure Policy

*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated reinsurance carrier by A.M. Best. Harborway Insurance is a trade name of Simply Business, Inc., which is a licensed insurance producer in all 50 states and the District of Columbia.

© Copyright 2021 Simply Business. All Rights Reserved. Simply Business, Inc. is a licensed insurance producer in all U.S. States and the District of Columbia. Simply Business has its registered office at Simply Business, 1 Beacon Street, 15th Floor, Boston, MA, 02108. In the state of California, we operate under the name Simply Business Insurance Agency, Inc., License #0M20593. In the state of New York we operate under the name Simply Business Insurance Agency. In the state of Texas we operate under the name, U.S. Simply Business, Inc. For more information, please refer to our Privacy Policy and Terms & Conditions.