Funding the Future: Economic Aid Act Adds Software and Computing Services to the Consolidated Appropriations Act

On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”) was passed within the Consolidated Appropriations Act, 2021 (“2021 Appropriations Act”). The Economic Aid Act and the 2021 Appropriations Act contain several changes important to PPP borrowers and “new” borrowers—either first time or second draw.

The COVID-19 relief package passed by Congress includes a second round of Paycheck Protection Program (PPP) loans for small businesses, with new provisions on helping companies transition to the cloud and worker protections such as employee personal protective equipment.

The legislation updates the definition of operational expenditures eligible for PPP funds to include any business software or cloud computing service facilitating business operations, product or service delivery, human resources and other expenses, according to the bill.

The PPP provision expanding coverage to cloud and software investments, introduced by Rep. David Scott, D-GA, will “help small businesses provide improved service in today’s modern economy,” Scott said in an October announcement.

It is likely that we will see employers maintaining or improving their cloud computing/ business software, and potentially increasing their business’ IT department in light of the recent changes.

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