The Economic Aid Act (“EAA”) was signed into law on December 27, 2020 and provides $900 billion in financial relief to struggling individuals, businesses, and organizations. The EEA also renews the Paycheck Protection Program (“PPP”) and expands its terms to allow for eligible 501(c)(6) organizations to become borrowers. Local chambers of commerce, labor and trade organizations, and a variety of other nonprofit groups such as professional business boards are now eligible to apply for the low interest and forgivable loans, now capped at $2 million.
501(c)(6) organizations will be eligible for loans under the PPP as long as they meet the following criteria:
- The organization is not a professional sports league or political campaign/political activities organization;
- The organization does not receive more than 15% of receipts from lobbying;
- Lobbying activities do not comprise more than 15% of the organization’s activities;
- The cost of lobbying activities did not exceed $1 million dollars during their most recent tax year ending prior to February 15, 2020; and
- The organization has 300 or fewer employees.
Organizations interested in applying should submit loan applications no later than March 31, 2021. Forgiveness applications may be submitted any time before the maturity date of the loan, which will vary depending on the borrower’s loan agreement.
Understanding the PPP’s benefits and forgiveness requirements should remain a top priority both for current borrowers and organizations interested in applying for the program. Please contact your KDDK attorney or any member of the KDDK business law team for additional information and guidance on the Economic Aid Act, CARES Act, or any related matter.