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Highlights from the New Stimulus Bill

On December 22, the United States Congress passed the Consolidated Appropriations Act, 2021 (CAA2021), which includes $892 billion in coronavirus stimulus spending. This long-awaited and highly contested piece of legislation ties coronavirus relief funding into a $1.4 trillion resolution for funding the federal government through September of next year. The nearly $900 billion in stimulus funds comprises a variety of measures, including a renewal of enhanced unemployment benefits, an extension of the Paycheck Protection Program, and another round of individual stimulus payments. Read on for a breakdown of the various COVID-19 stimulus measures included in CAA2021.

On Sunday, December 27, 2020, President Trump signed the CAA2021.

Below are important highlights from the new stimulus package.


Paycheck Protection Program (PPP)

· Provides $284.5 billion to reopen and strengthen the PPP for eligible first-time and second-time borrowers.

· Develops a process for a small business to receive a “second draw” PPP loan if the business has fewer than 300 employees and can demonstrate a revenue reduction of 25% or more from 2019

· Maximum loan amount for a second draw loan cannot exceed $2 million

· Increases the PPP loan amount available to NAICS 72 businesses (Accommodations and Food Service) by increasing the maximum loan amount to the lesser of 3.5 X 2019 average monthly payroll or $2 million

· Creates a simplified PPP loan forgiveness application for loans under $150,000 by directing the SBA to develop a one-page application containing borrower self-certifications on the number of employees retained and the estimated total amount of the loan spent on payroll costs

· Expands the list of eligible expenses to include covered operations (software, cloud computing, and other human resources and accounting needs); property damage costs due to public disturbances that occurred during 2020 that are not covered by insurance; covered supplier costs; and covered worker protection expenditures (PPE)

· Makes some 501(c)(6) nonprofit entities, destination marketing organizations (DMOs), housing cooperatives, newspapers, broadcasters, and radio stations eligible for PPP loans

· Repeals CARES Act provisions that deduct the amount of an EIDL Advance from a borrower’s PPP loan forgiveness amount

· Updates conflict of interest rules and prohibits publicly traded companies from PPP

· Provides a process for borrowers to request an increased loan amount if new/updated regulations change eligibility

· Codifies SBA-issued guidance regarding faith-based organizations and churches to ensure eligibility for those entities remains intact

· Creates a special farmer and rancher loan amount calculation

Economic Injury Disaster Loan (EIDL) Advance Program

· Provides $20 billion dollars to restart and extend the SBA's EIDL Advance Grant for small businesses in low income communities

· Allows EIDL Advance recipients that received less than $10,000 to reapply for the difference between the amount received and $10,000

· Increases verification tools at the SBA to ensure accurate information is submitted on a grant application

Grants for Shuttered Venues

· Creates a $15 billion grant program for eligible venues, theaters, museums, and zoos

· Provides $3.5 billion to resume the principal and interest (P&I) payments of new and existing small business loans guaranteed by the SBA under the 7(a), 504, and Microloan programs

7{a), 504 and Microloan Program Enhancements

· Appropriates $2 billion to enhance the SBA's existing government guarantee loan programs, including the 7(a) Loan Program, the 504 Loan Program and the Microloan Program

· Extends the waiver of borrower and lender fees under the 7(a) and 504 loan programs

· Increases the 7(a) loan guarantee amount from 75% to 90% percent

· Extends the $1 million loan limit for SBA Express Loans

· Establishes a 504 Express Loan Program

· Enhances the Microloan program to provide financial and technical assistance to businesses impacted by the COVID-19 pandemic

INDIVIDUAL MEASURES Unemployment Benefits Portion of the stimulus package: $120 billion An extension of federal unemployment supplemental benefits through March 14, 2021 at a rate of $300 per week. Additionally, it legislates an extension of two pandemic unemployment programs set to expire at the end of December, the Pandemic Unemployment Assistance program, which has been expanded to provide aid to self-employed, temporary, and gig workers, and the Pandemic Emergency Unemployment Compensation Program, which provides an additional 13 weeks of benefits beyond the typical 26 weeks that states provide to jobless workers.

Extension of Eviction Moratorium & Rental Assistance Portion of the stimulus package: $25 billion A temporary extension of the federal eviction moratorium through January 31, 2021 and $25 billion in emergency rental assistance.

Economic Impact Payments Portion of the stimulus package: $166 billion Direct payments of $600 for qualifying adults and their child dependents. Individuals earning up to $75,000 annually (or married couples making up to $150,000) qualify for the full payment; individuals earning between $75,000 and $99,000 qualify for a reduced payment; individuals earning more than $99,000 do not qualify.

Food Aid Portion of the stimulus package: $13 billion Additional funding for the Supplemental Nutrition Assistance Program and a benefit increase of 15% to last for six months.

ADDITIONAL MEASURES Support for Education Institutions Portion of the stimulus package: $82 billion This money is designated to help schools and universities reopen. The funds are earmarked as follows: $54 billion for public K-12 schools, $23 billion for colleges and universities, $4 billion for the Governors Emergency Education Relief Fund, $2.75 billion for private K-12 education, and nearly $1 billion for Native American schools.

Funding for Vaccine Distribution and Coronavirus Testing Portion of the stimulus package: $68 billion CAA2021 includes money for both supporting the distribution of coronavirus vaccinations and for helping to pay for costs associated with COVID-19 testing. $30 billion is directed for the procurement of vaccines and treatments, the funding of distribution for states, and the creation of a strategic stockpile. $22 billion is earmarked for testing, tracing, and mitigation. Of the remaining funds, $9 billion will go to healthcare providers and $4.5 is earmarked for mental health.

Increased Broadband Access Portion of the stimulus package: $7 billion Funding for broadband initiatives to support better connectivity and infrastructure. $3.2 billion is earmarked for the Emergency Broadband Benefit, which provides low-income families and individuals laid off or furloughed due to the pandemic with a monthly stipend of $50 to pay for internet services. $1.9 billion is dedicated to financing “rip and replace” projects—the removal and replacement of Huawei and ZTE networking equipment. $1 billion will go to Tribal broadband programs and $300 billion is dedicated to rural broadband deployment.

Farm Aid Portion of the stimulus package: $13 billion Funding for farmers and ranchers. Postal Service Portion of the stimulus package: $10 billion CAA2021 includes the forgiveness of a $10 billion loan made to the United States Postal Service earlier this year.

WHAT’S NOT INCLUDED A number of provisions that were initially included in proposed coronavirus stimulus legislation were, ultimately, left out of the bill. These include protection for businesses against litigation regarding COVID-19 exposure, financial aid to state and local governments, and an extension of federal student loan forbearance.

This overview was pieced together with information provided by Reynolds Bone & Griesbeck and the U.S. Small Business Administration.


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