PPP Round 2 is here! The Small Business Administration (SBA) announced that the Paycheck Protection Program is back. Those who weren’t able to get in for the First Draw could apply as of January 11, 2021. For the Second Draw PPP loans, applications opened on January 13, 2021. Here are the details you need to know.
Who Qualifies for PPP Round 2?
Borrowers who received a First Draw PPP loan and already have or plan to use the full amount for allowed uses only can apply for the Second Draw. Applicants cannot have over 300 employees and must show a 25% or more gross receipts reduction compared to the same quarters in 2019 and 2020.
The SBA has set aside $25 billion for eligible borrowers with no more than ten employees or borrowers in low or moderate-income neighborhoods wanting loans for $250,000 or less.
Loan Details and Maximums
Borrowers who previously received a First Draw PPP loan can apply for the Second Draw right now. The same general terms exist for the Second Draw as the First Draw.
Allowable uses for PPP funds are:
- Payroll and benefits costs
- Business mortgage interest
- Business rent
- Business utilities
- PPE costs related to COVID-19 compliance
- Uninsured costs of property damage because of looting or vandalism in 2020
- Certain costs and expenses for operations and suppliers
The loans are capped at 2.5x average monthly 2019 or 2020 payroll costs, or up to $2 million. Borrowers in the Accommodation and Food Services industry can apply for 3.5x average monthly payroll costs.
When and How Can I Apply?
Those looking to apply for the Second Draw PPP Loan can apply beginning January 13, 2021, until March 31, 2021. You can use this link to find participating lenders near you. The terms are the same no matter what lender you use.
To prepare for the application process, the SBA has provided a PDF of the loan application. You can use this as a reference to see what information the lenders need, which will speed up the process from application to funding.
The SBA has also provided a 17-page resource guide to help you:
- Calculate revenue reduction
- Determine the maximum loan amount your business is eligible for
- What documentation you must provide to be approved
Still not sure you qualify? Let us help you get through the red tape so you can decide if your small business is eligible and if it’s in your best interest to apply.
What About Forgiveness?
So far, there is nothing mentioned about the Second Draw PPP Loan Forgiveness. We can assume that last year’s forgiveness guidelines are the same for the Second Draw, but further guidance is needed.
Do You Need Help Navigating PPP Round 2?
Suppose you’re unsure about the process for PPP loans. In that case, JStevens Accounting in Annapolis, Maryland, is here and ready to help you. Our extensive knowledge of bookkeeping and accounting means we can guide you through the process and even help ensure you’re meeting the forgiveness requirements once they’re confirmed.
Don’t wait until the Second Draw PPP Loan deadline is here to start preparing your application. Contact us today so we can evaluate your business and help you make the right financial decision now so you won’t feel like you missed out later.