New relief bill includes more PPP loans, but the rules to apply are different

WASHINGTON D.C., DC — The newest COVID-19 relief bill contains $285 billion for the Paycheck Protection Program, which could mean some small businesses might get some much-needed help.

As the WCNC Defenders team has reported, the first PPP rollout was fraught with issues and fraud, largely unregulated and widely criticized for favoring big business over smaller mom-and-pop shops.

Because of that, there are some new rules this time around to avoid the same issues.

RELATED: Reports: Large chunk of PPP loans went to big businesses

The initial Paycheck Protection Program under the CARES Act funneled about $525 billion in forgivable loans to more than 5 million businesses with the intention to keep them afloat amid the coronavirus pandemic.

From unreasonable delays to flat out denials, many Charlotte-area small businesses said they fell through the cracks of the broken program.

Tax expert Julio believes the first time around, perhaps unintentionally, big businesses benefitted more than small businesses.

RELATED: 87% of NC businesses that received PPP loans have not been publicly named

“No question about it," Gonzalez said. "Most of the funds went to the big companies that had access to other sources of capital.”

Gonzalez said that’s why things will look different this time.

“Now the restrictions are really that you have to show material, you have to show economic need," Gonzalez explained. "That's a big discrepancy from the first round.”

RELATED: Unsealed search warrant details PPP fraud investigation with Charlotte ties

Here are the main changes to the PPP program: 

• The loans are now capped at $2 million per business, compared to $10 million before
• Applicants must have less than 300 employees
• Applicants must prove at least a 25% drop in sales from the same time in 2019
• Publicly traded companies are now not eligible
• $12 billion has been set aside specifically for minority-owned businesses

“I think this time, more [is] geared towards the small business," Gonzalez said. "I think there'll be far more success."

But as before, the application process can be daunting, so hiring a financial expert to handle it may be a worthy investment, Gonzalez advised.

RELATED: Congressional investigation finds $1 billion+ in PPP fraud

“You’ve got to have an accountant or someone that you can count on to help you through this process because it's not an easy process," Gonzalez said.