NFIB's Guide to New Federal Lending Options

Date: April 01, 2020

Updates Regarding Federal Lending Options

Many Paycheck Protection Program (PPP) borrowers may now be eligible to apply for forgiveness directly through the U.S. Small Business Administration (SBA). On Wednesday, August 4, the SBA opened a direct forgiveness portal for loans under $150,000 through participating lenders. Learn more here.

While the PPP is no longer accepting new applications, the Targeted Economic Injury Disaster Loan (EIDL) Advance and the Supplemental Targeted Advance grant programs, as well as the EID Loan and micro-loan programs remain open. Learn more and find out if your business qualifies for the up to $15,000 in EID Advance grants here.

Congress has passed several laws with provisions to help small businesses with cashflow and liquidity issues caused by COVID-19. Most recently, the Consolidated Appropriations Act of 2021 that became law in December 2020 and the American Rescue Plan Act which was enacted in March 2021 provide several business-friendly tax changes.

NFIB experts have analyzed the federal lending programs established in response to COVID-19 to discover how our members may benefit from them. The most important include:


The Employee Retention Tax Credit (ERTC) program applies to tax years 2020 and 2021 and offers small business owners up to $33K in refundable tax credits per employee.

Talk to your tax professional or bookkeeper about taking advantage of the expanded Employee Retention Tax Credit (ERTC). If you don’t have a CPA or tax professional, you can check here or here to find one in your area.

Learn more at and see the August 4, 2021 ERTC guidance from the IRS here.

Paycheck Protection Program

  • The centerpiece CARES Act program, PPP offers federally guaranteed loans that include forgivable qualifying expenses for all small businesses and self-employed individuals. PPP loans can be totally or partially forgiven for businesses that spend them on qualifying expenses within a specified covered period. December 2020 PPP 2.0 legislation allocated an additional $284 billion in funding that reopened the program for new loan applications and second-draw loans. As of May 4, 2021, PPP 2.0’s funds had been exhausted, closing the program to most new applications.

  • Businesses are eligible to receive a second forgivable loan if they employ 300 employees or less; have used or will use the full amount of their first PPP; and demonstrate at least a 25% reduction in gross receipts in any quarter in 2020 compared to the same quarter in 2019. Small business owners can also apply for an initial PPP loan.

    The December recovery package:

    • Simplified the forgiveness application for loans under $150,000.
    • Allows borrowers to specify a covered period between 8 and 24 weeks for PPP 2.0 loans.
    • Repealed the requirement of deducting an EIDL Advance Grant from the PPP loan forgiveness amount.
    • Expanded eligible expenses to include costs for modified business operations, supplier costs, and costs associated with complying with health and safety guidelines. Payroll, benefits, rent, mortgage interest, and utilities also continue to be qualifying expenses.
    • Made businesses in the restaurant and hospitality industries eligible to receive loans of 3.5 times average monthly payroll, rather than 2.5 times.

    The December 2020 COVID-19 recovery package also updated PPP tax implications, making the program more friendly to struggling small businesses in the following ways:

    • Reversed IRS ruling to allow tax deductions for PPP forgiven expenses and clarified that PPP loan forgiveness is not taxable income.
    • Clarified that EIDL Advance Grants are not included in taxable income.
    • Extended FFCRA tax credits through March 31, 2021.
    • Extended the Employee Retention Tax Credit through December 31, 2021 and expands the credit, allowing PPP borrowers to claim the credit retroactively and prospectively.

    Read our COVID-19 recovery 2.0 fact sheet and view our bi-weekly webinars for answers to your most common PPP and EIDL program questions.

SBA Loan Deferment

Small businesses with non-disaster SBA loans can have their loan payments covered for an additional three months as a result of the December 2020 COVID-19 recovery package. Learn more about SBA’s guidance on loan deferment here.

SBA Economic Injury Disaster Loan Program

Small businesses, nonprofit organizations of any size, or U.S. agricultural businesses with 500 or fewer employees that have suffered substantial economic injury as a result of the COVID-19 pandemic can apply for an Economic Injury Disaster Loan (EIDL) through December 31, 2021.

The federal COVID-19 recovery package signed into law on December 27, 2020 includes an additional $20 billion for EIDL Advance Grants, reopening the program to new applicants whose businesses have suffered a decrease in gross receipts of 30% and are located in low-income census tracts (similar to the New Markets Tax Credit).

The latest recovery legislation also allows eligible small businesses to receive additional funding if their first EIDL Advance Grant was under $10,000. Learn more and apply for Economic Injury Disaster Loans through the SBA here.

If you have any questions, please contact NFIB’s Small Business Legal Center at 800-552-NFIB (1-800-552-6342) or email [email protected]. And please visit NFIB’s coronavirus news hub for frequent updates.

Read the Latest Legislative and Implementation Updates on Coronavirus


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