Cloud becomes critical: PPP loans to cover technology needs

Dive Brief:

• A COVID-19 relief package passed by Congress last month 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 cloud legislation was introduced in October, but passed in late December. 
• 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.

Dive Insight:

As businesses upped cloud reliance to support remote work last year, IT departments reassessed budget allocations. For small businesses, a PPP loan could help clean up and streamline software infrastructure. 

In the cloud, more usage means higher costs. Poised to grow cloud spend over the next several months, IT decision-makers manage a changing budget. On average, companies are already 23% over cloud budget, according to an April 2020 Flexera survey of 750 cloud decision-makers and users.

Small businesses face especially tight financials as every dollar counts toward the bottom line. 

The Small Business Administration doles out PPP loans to help small businesses hit especially hard by the pandemic keep paying their employees. Now, with the PPP update, cloud and software upgrades are considered critical to recovery ahead. 

“By including these types of expenses, Congress recognizes the important role of technology solutions for companies,” said Scott Talbott, SVP of the Electronic Transactions Association, in a statement.

Source: CIODIVE