New Legislation Creates PPP Loan Opportunities for 501(c)(6) Organizations

The Consolidated Appropriations Act, 2021, includes a new provision allowing 501(c)(6) organizations (not professional sports organizations) and “destination marketing organizations” to apply for and receive Paycheck Protection Program (PPP) loans. This is noteworthy because these organizations were previously excluded from receiving PPP funding in the Coronavirus Aid, Relief, and Economic Security Act.

However, there are some nuances to this, which make the PPP qualifications for these organizations a bit different than their 501(c)(3) peers. First, these organizations are limited to 300 employees. Additionally, the organization cannot receive more than 15% of its revenue from lobbying, and lobbying cannot comprise more than 15% of the total activities of the organization. The cost of the lobbying activities must also not exceed $1 million, and, as with other PPP loans, none of the proceeds from these loans may be used on lobbying.

This legislative change is especially attractive for these organizations as it allows them to apply for a “first round” PPP loan up to $10 million (based on payroll costs).

Further resources regarding the calculation of the PPP loan amount and loan forgiveness can be found here. PPP loans are processed through the U.S. Small Business Administration and are generally accessible through your existing banking relationship.

If you need assistance or have questions, please contact your KSM advisor or contact us.

Visit the KSM COVID-19 Resource Center