Good News! The U.S Treasury has opened a second round a Paycheck Protection Program (PPP) funding. As of today, 5000+ businesses have received upwards of $500 Billion through a PPP loan, but the program has been plagued with missed payments, confusion regarding forgiveness, and claims from huge businesses.
During a presser announcing the details of the program, administrator Jovia C. said “Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery”.
In this round of funding, community financial institutions and lenders will be given priority to submit applications to the SBA from businesses that either did not qualify in the first round or were unable to receive the funds. Soon after, the SBA said that they plan on opening the program to “all participating lenders”.
The deadline to apply for a PPP loan is March 31.
Who is Eligible for a Second PPP Loan?
Let’s face it. Even after multiple attempts at stimulus injections from congress, millions of business owners are still suffering from the prolonged economic shutdown stemming from the pandemic. This second round of funding comes as a relief to many who had just run out of funds from the first time around.
In order to qualify for a second PPP loan, you must have:
- Previously received a PPP loan and plan to or already have used the full amount for qualifying expenses
- < 300 employees
- At least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
The eligibility criteria has changed for this round of funding. Notably, the eligible business size has dropped from 500 employees or less to 300 employees or less, which would make some businesses ineligible for a second loan even if they were approved for a first draw.
Are there any changes from the first round of funding?
Originally, The PPP program was intended to cover expenses within an 8-week window, but the government eventually increased it to up to 24 weeks of expenses.
In the first round, Funds also were only eligible for forgiveness if at least 75% of the amount granted was used for payroll… but that’s since been lowered to 60%.
Today, borrowers can choose their loan’s covered period for loan forgiveness purposes to be any length between eight and 24 weeks. Additionally, expenses such as property damage, operations, supplier costs and worker protection are now eligible for full or partial forgiveness.
Should You Apply?
If you missed the first round or are just simply overwhelmed by the idea of applying for a PPP loan, this might be a good time to reconsider.
It’s important to note that forgivable government loans do not come by every day, and if you can take advantage and improve your situation (given that you qualify) then there is no reason not to. Even if your business does not ultimately qualify for forgiveness, you will still have up to 5 years
The new rules also permit automatic forgiveness of loans of $150,000 or less with an easy self-certification from the business owner that they meet the criteria for forgiveness.
If you’re a small business owner and hesitated to apply because you didn’t have an existing business banking relationship to help you with the process, that shouldn’t be a deterrent, says Frank Balestreri, a partner at Bay-area based accounting firm Sensiba San Filippo LLP, who leads a team that focuses on PPP loan and PPP loan forgiveness applications.
Instead, you can utilize a service like ours to apply for you! Making the process simple and swift.