Second PPP Loan is Now Available

For businesses looking for help, another round of PPP is here. As of today, Monday November 11th, the application window has been opened for businesses who have not received past PPP loans. These applications will go through community financial institutions in an effort to distribute loans to low-income, minority owned, and/or disadvantaged businesses first. For those who have received a prior PPP loan or who do not meet those requirements, the window for application with traditional financial institutions will be opening next week (the 18th).

Who is eligible?

Many of the same requirements apply. You can read our previous article from the first ppp loan here. There are some additional restrictions. Businesses with over 300 employees are excluded. Further, you must be able to show at least a 25% reduction in revenue in 2020 from a comparative quarter in 2019.

How much funding is available?

 For those familiar with the last ppp rollout, you’ll know that the first batch of funding ran out incredibly fast. The second round of funding was seemingly more than enough with about $100 billion in funds left over and not distributed. This round of funding contains $284 billion, which is believed to be adequate. However, it is still advised to apply sooner rather than later if you are interested.

How much money can you get?

 This round is very similar to last time, with some minor changes. Those applying for a first-time PPP loan can receive up to 2.5 times their average monthly payroll costs, up to $10 million. Second time applicants can receive the same, but are limited to $2 million. Accommodation and food industries can receive 3.5 times average monthly payroll costs. For those who own businesses that do no have payroll (Schedule C or partnerships) there is a calculation using the net income of the business up to $100k for self employed individuals to determine average “payroll.” In other words, not having payroll does not exlude you from applying for this loan.

Is the loan forgivable?

Yes. As long as funds are used appropriately. Funds can be used for payroll costs, mortgage interest payments, rent, utilities, and operational items like supplier costs and protective equipment or workplace modifications related to coronavirus protection. The funds must be used within 8 to 24 weeks of receiving the loan.

For those receiving less than $150,000 in loans, the process for forgiveness is simplified. Borrowers under this limit will be able to submit a one-page certification that shows the number of employees retained, estimate of the amount of the loan used for payroll costs, the total loan mount, and proof of revenue loss.

Loans that are not forgiven are subject to a 1% interest rate.

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