Additional Information on the Revamped Paycheck Protection Program
The first round of PPP funding ran out fast, and many businesses who were not prepared ahead of time were unable to successfully apply for funding.
We want to help you be as prepared as possible to get your application in and accepted.
The following is a rough timeline of the Consolidated Appropriations Act, 2021 as it relates to the second round of PPP funding:
December 21, 2020 – Congress passes Bill
December 27, 2020 – President signs Bill into Law
Yet to Happen (potential timeline)
Week of January 4, 2021 – The SBA issues forms/guidance
Week of January 11, 2021 – The SBA starts accepting applications
Week of January 15, 2021 – The SBA issues additional guidance
Now, to recap, an entity can apply for the lesser of $2 million or 2.5X its monthly payroll cost (if you are a restaurant or hotel, you can apply for the lesser of $2 million or 3.5X your monthly payroll costs).
IT IS NOT CLEAR HOW “PAYROLL” IS DEFINED FOR THIS SECOND ROUND OR IF ENTITIES ARE ALLOWED TO USE THE SAME DEFINITION AS WAS USED FOR ROUND ONE.
Entities are eligible to apply if they:
· Can show proof of 25% economic loss in at least one quarter during 2020
· Have 300 employees or less
· Have operated your business since on or before February 15, 2020
Loans will be forgiven (meaning you do not need to pay them back) if you use them for eligible expenses, including 60% for payroll expenses and 40% for other eligible operating expenses. While these “other eligible operating expenses” were limited to rent, utilities and mortgage interest in the first round of PPP funding, “other eligible operating expenses” are expanded to include operating expenses, property damage costs (caused by acts of civil unrest), supplier costs and worker protection costs (both operating and capital costs) in this second round.
So, what should you be doing this week? If you are going to apply, get ready by assembling the following documents (this may not be a complete list, but we believe it is a good starting point):
· Copy of Photo ID for all owners who own 20% of the business or more
· 2019 and 2020 Profit and Loss Statements to show revenue loss during 2020
· 2019 Business Tax Returns
· Articles of Incorporation / Business Organizational Documents
· Payroll Reports for all 12 months of 2019 and 2020