Using PPP-2 Loans for Cloud Investment/Software Upgrades


A new wave of funding has been approved for the federal Paycheck Protection Program (PPP-2). This new program includes a provision that increases flexibility with non-payroll expenses, such as cloud investments and software upgrades.

Small businesses can invest up to 40% of this federal loan into “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 and expenses.”

In practical terms, this means the bucket of non-payroll expenses that PPP-2 applies to expanded to include IT expenses, such as accounting software programs or monthly subscriptions to cloud software.

In 2020, businesses had to increase their reliance on cloud computing to support remote work, and IT leaders are now faced with managing an ever-changing budget. The legislation recognizes that cloud and software upgrades are going to be vital to business continuity and recovery going forward.

If 40% is used on cloud investments and software upgrades, the remaining percentage must be used on payroll. Similar to the initial PPP funding in 2020, this round can also be turned into a grant if spent on qualifying expenses.

See the link below for more information:

PPP-2: How small businesses can apply federal loans toward IT upgrades | CIO Dive

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