Congress Allows Acumatica as Forgivable Expense for the 2021 Updated Paycheck Protection Program

PPP Cloud ERP Acumatica

Updated Paycheck Protection Program Allows 40% of Loan to Be Allocated Toward Cloud Software Like Acumatica Cloud ERP


The COVID-19 stimulus plan passed by Congress in late December included additional funding and updated allowances for forgivable expenditures under the updated Paycheck Protection Program (known as PPP-2).

Most notably:

With the updated Paycheck Protection Program, SMBs can now invest up to 40% of the loan into cloud and software upgrades, including into a mission-critical cloud ERP like Acumatica.

In this article, we will cover the details of PPP-2 and its cloud stipulation under H.R. 8620, so you know how to leverage this second round of small business funding.

What Is H.R. 8620 and How Does It Relate to PPP-2, the Updated Paycheck Protection Program?

The new iteration of the PPP, called PPP-2 (sometimes P.P.P. 2.0), provides $284 billion in new funding for small to midsized businesses and works much like the original Paycheck Protection Program. Like round 1, PPP-2 features an online application process, fast funding, and a range of forgivable expenses under the loan.

Just like the first PPP, savvy business leaders can easily transform the loan into a grant that does not need to be paid back.

To enhance PPP-2 and provide stimulus funds for businesses to move to the cloud, Rep. David Scott, D-GA, introduced H.R. 8620 in October 2020 to allow for greater flexibility on how forgivable loan monies can be spent.

H.R. 8620 is now included as part of the updated Paycheck Protection Program.

How Does PPP-2 Work?

The updated Paycheck Protection Program expands eligibility for PPP loan forgiveness to include employee PPE, as well as remote-work-enabling investments into cloud and software solutions like Acumatica ERP.

With the new, more flexible allowances, covered operations expenditures under PPP-2 apply to: “any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records, or expenses.”

Here are some fast facts:

  • Businesses must spend 60% of the loan on payroll expenses to meet forgiveness stipulations.
  • Businesses can invest remaining loan monies (up to 40% of total) into cloud and software expensesand still remain eligible for loan forgiveness.
  • PPP-2 continues to allow for non-payroll expenditures such as rent, utilities, and mortgage interest payments, also as part of the 40% of the loan allowed for non-payroll expenses.
  • The new PPP-2 can also be used to cover property damage costs caused by looting or vandalism during 2020.
  • Loan expenses that are not forgiven will carry a 1% interest rate and a 2-5 year repayment term.

In short: the updated PPP-2 now covers IT expenses for business continuity such as accounting software programs, cloud ERPs like Acumatica, or subscriptions to cloud software.

Is Your Business Eligible for PPP-2?

Good news: even if your company received a loan in the first round of the PPP, you may still be eligible to receive a second loan from PPP-2.

To be eligible, second-time borrowers must:

  • Have 300 or fewer employees
  • Have already spent or have plans to spend the first loan before the second is distributed
  • Show a 25% decline in gross revenues in 2020, as compared to 2019

First-time borrowers are eligible if they:

  • Employ 500 or fewer workers
  • Have a NAICS code beginning with 72 (Accommodations and Food Services) with more than one physical location and less than 500 employees per location

Self-employed persons, independent contractors, and sole proprietors are eligible to apply. PPP-2 also allows more groups to apply for loans, including nonprofit housing cooperatives, newspapers, broadcasters, and local chambers of commerce.

Additional Tips for Your PPP-2 Application

Businesses interested in applying for the new round of Paycheck Protection Program funding have until March 31 to complete the application process and can expect disbursement within a few days if approved. Applicants will have 8-24 weeks to spend the money.

Also, make sure to maintain careful records on how the money was spent, so you can better ensure loan forgiveness. Speak with your accountant, bank, or lender to determine precisely which expenses are forgivable, and track those investments or expenditures closely. (As a hint, Acumatica ERP can help you track those expenses too – we can show you how.)

Is It Time for Your Company to Invest in Cloud Software Like Acumatica ERP?

H.R. 8620 was added to PPP-2 in response to the growing realization that cloud software was 100% necessary for many businesses to maintain business continuity during the pandemic lockdowns and social distancing measures.

The inclusion of H.R. 8620 in PPP-2 demonstrates that lawmakers believe that cloud software is critical to maintain business operations in our current situation.

Would you like to know more about your options for business cloud software investments, so you can prepare for your PPP-2 application? SWK Technologies can help.


Contact the Acumatica ERP experts to learn more about your options in the cloud.


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