COVID-19 has negatively impacted so many small businesses, mine included. I’m blessed, however, to be able to assist businesses in this second round of PPP loans, or Paycheck Protection Program Loans with one link that sends your application to over 3000 SBA qualified lenders (for either first-time applicants or those applying for the second round). Congress has allocated $285 billion for the second round of PPP. The “reboot” includes provisions to help those struggling the most-even the smallest of small businesses, and there’s an added benenfit: if you’ve already received a PPP loan in 2020, you can qualify for a second PPP loan.
SBA, in consultation with the U.S. Treasury Department, reopened the Paycheck Protection Program (PPP) for First Draw Loans the week of January 11, 2021.
SBA is currently accepting First Draw PPP loan applications from participating community financial institutions (CFIs) and lenders with under $1 billion in assets, which includes approximately 5,000 institutions, including community banks, credit unions, and farm credit institutions.
First round criteria:
-Your business was in operation as of February 15, 2020
-You’re an independent contractor or sole proprietor, or your business/organization has either either employees or independent contractors (less than 500 for either) for whom they have associated payroll costs
-You certify that your business has sustained economic damage due to COVID-19.
First Draw PPP Loans can be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
Second Draw PPP Loan applications opened up on January 13, 2020
Here’s the criteria you need to meet to qualify for a second round PPP loan:
-Your business has fewer than 300 employees
-You can show a 25% revenue reduction during the first, second, or thrid quarter of 2020 relative to the same quarter in 2019
NEW CRITERIA FOR BUSINESSES HIT THE HARDEST:
-If you own a restaurant, hotel, or live venue that falls under NAICS code starting with “72”, you can apply for 3.5 times your monthly payroll costs.
-If you own a live event or production company that was forced to close, you may be eligible for a special grant.
-If you’re a BIPOC (Black, Indigenous, or people of color)business owner, you’ll have access to $12 billion specifically set aside for underserved businesses.
PPP full allowable uses of the loan are:
-Payroll costs, including compensation: salaries, wages, commissions, cash tips payments, along with other payroll-related costs like retirement payments, state and local taxes on payroll, payment for vacation or paid leave, group healthcare costs including premiums, and allowances for separation or dismissal.
-Mortgage interest payments (but not payments on the principal)
-Interest on any other debt obligations incurred before a specific period (SBA will release details soon)
-Covered operations expenditures
-Covered property damage costs
-Covered supplier costs
-Covered worker protection expenditures
Can you get a PPP loan if you have other loans?
Yes,you can, even if you have other loans including SBA loans. However, you cannot use the funds from the PPP loans and other loans for duplicate use at the same time. For example, if you use a disaster loan (EIDL or loan advance) to pay your business’ rent in February, you cannot also apply for a PPP loan to cover February rent.
How long will it take to receive PPP funds?
Once a borrower receives a Preferred Lender Program (PLP) number for their loan, the loan is apporved by the SBA, and the funds are reserved for the borrower. Starting on the date a borrower receiveds a PLP number, the lender has 10 calendar days to disburse the funds. The loan must be disbursed in full, and the 24-week loan forgiveness period begins the day the funds are disbursed.
If a lender cannot disburse funds due to delays from a borrower, like missing paperwork, the lender has 20 days to disburse the funds. If they haven’t received the necessary information from the borrower by the end of the 20-day period, the loan may be canceled. If loan funds are designated for the refinancing of an Economic Injury and Disaster Loan (EIDL), the funds will be deducted from the disbursement amount and paid directly to the SBA by the lender.
PPP FORGIVENESS GOT EASIER:
PPP loans are eligible to be forgiven, up to 100% of the loan principal if the funds are used appropriately. The SBA is even releasing a simplified application for businesses who received loans under $150,000, which will make it easier to apply.
We’ll update you as more information is released from the SBA.
Here’s the link to apply for either round and have your application go out to over 3000 lenders:
Hang in there Small Business owners!