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Cooperatives Now Eligible for New PPP Loans

On December 28, I wrote the blog post, “Housing Cooperatives and PPP Loans: Is It Time To Rejoice?” regarding the significant and retroactive changes to the eligibility and administration of the Paycheck Protection Program (“PPP”) through the Consolidated Appropriations Act, 2021 (“CAA”) and “Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act.” This has been updated, as of December 30, 2020.

Cooperatives Now Eligible for New PPP Loans

With the passing of the CAA into law, the PPP now applies to Housing Cooperatives with 300 or fewer employees. The Small Business Administration must provide new regulations for this second round of PPP within ten days of the enactment of the CAA. Cooperatives (“co-ops”) should plan to act quickly to apply for loans and begin collecting the necessary financial information.

A basic overview of the major provisions is as follows:

  • Co-ops may be eligible to receive a maximum loan of two-million-dollars or up to 2.5 times their monthly payroll expenses
  • In order to qualify for loan forgiveness – 60% of the proceeds must be used for payroll and the remaining 40% may be used for other eligible expenses such as rent, utilities, and mortgage payments

Next Steps

If the co-op has a lender, it would be a good idea to contact them right away since loans are given on a first-come, first-served basis. Our firm is available to answer any questions and provide help and guidance throughout the process.

If you have any questions about this post or any other related matters, please feel free to email me at jlevitt@norris-law.com. For other topics related to the coronavirus, visit our Coronavirus Thought Leadership Connection.

The information contained in this post may not reflect the most current developments, as the subject matter is extremely fluid and constantly changing. Please continue to monitor this site for ongoing developments. Readers are also cautioned against taking any action based on information contained herein without first seeking advice from professional legal counsel.

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