As we round off 2020, arguably the most challenging year in recent history, we also go into 2021 with fresh hope: hope for a renewal of normal life, hope for economic revival, and hope for U.S. small business.
Despite past year struggles, small business has shot off into new directions in 2020, including a massive exodus into the digital and e-commerce spaces, catering to a gaping need for contactless, safe products and services.
Against this background, the Paycheck Protection Program (PPP) loans have provided a glimpse of hope for countless small and very small businesses since April 2020. On its part, stimulus checks made it possible for people across the country as well as solopreneurs and very small businesses to get some extra cash.
Good news is, both programs are having a comeback at the end of 2020-beginning of 2021. Even businesses that got a PPP loan earlier in the year may now apply for a second one.
New round of PPP loans for both first and second-timers
On December 27, 2020, President Trump signed into law a $900 billion coronavirus relief package and extended the massively discussed Paycheck Protection (PPP) loan program.
As of December 2020, PPP loans for small businesses will be available for another round, with applications open until March 31, 2021.
This time, the PPP loan program will have slight differences as per its prior versions. For example, the maximum loan amount will be $2 million as opposed to the former $10 million.
Also, the maximum size of a business that can apply for the PPP loan program is now cut down to 300 employees from the previous 1000.
As before, business owners will have to use over half (60%) of the loan for payroll purposes, including personal payroll for solopreneurs.
Importantly, you can now get a second PPP loan, even if you received one earlier in the year. Entrepreneurs that have already received a PPP loan earlier in 2020 are eligible to receive a second PPP loan called a “second draw loan”.
Second stimulus check
Another stimulus bill signed into effect on December 27, 2020 was the Second Stimulus Check, amounting to $600.
The stimulus check will be available for Americans who make under $75,000 per year or $150,000 for married couples.
Individuals making over $75k ($150k for couples) will still be eligible, however, the payments will be diminished compared to the original target category. However, anyone making over $87,000 and $174,000 (couples) will not be eligible for the $600 stimulus bill.
While the stimulus bill is targeted primarily at individuals, very small business owners and solopreneurs can also benefit if they fall under the relevant income category.
Although the House of Representatives also passed a much-discussed $2000 stimulus bill into effect, it’s expected to meet opposition when it reaches Senate. However, the $600 bill is signed into law and is expected to reach mailboxes in the nearest weeks.
Stimulus checks require no special application. If you fall under the eligible income category, expect to receive a $600 Stimulus Check in your mailbox in late 2020 – early 2021.
To make sure that your IRS mailing information is up to date and find out the status of your payment, visit the IRS website’s “Get My Payment” portal.
More good news for 2021:
Complement with financial modeling guide for beginners and these 5 effective ways to cut your expenses without budget cuts for more ways how smart financing can help you enter 2021 with confidence.
