Great News for Small Businesses – Second Round of PPP Loans Available!
On December 27th, the $900 billion relief bill became law; this law includes a revamp and extension of the Paycheck Protection Program. The Program, commonly referred to as PPP, is designed to help small businesses, nonprofits, and venues that have faced financial struggles due to the coronavirus pandemic. The most pertinent updates from the PPP revamp include the following:
- The bill allows new PPP applications to be submitted by eligible applicants who did not previously obtain a PPP loan;
- Some businesses that have already obtained a PPP loan will be permitted to obtain a second loan, called a “PPP Second Draw”;
- There is simplified reporting for PPP loans that do not exceed $50,000 (a simple one-page report certifies your compliance); and
- Rules will be changed for existing PPP loans, new PPP loans, and PPP second draws in areas such as eligibility, allowable expenses, and forgiveness.
Regardless of whether you have already obtained a PPP loan, are looking to obtain a second, or are hoping to take advantage of this program for the first time, it is important to familiarize yourself with the updated rules and changes that may be relevant to your business. For example, eligibility for PPP Second Draw requires businesses to demonstrate that they experienced a 25% or more reduction in gross revenue during one of the first three quarters of 2020 compared to their 2019 earnings, as well as provide proof of how many employees they have at their company. The decision to apply for a first or second PPP loan should not be made without careful consideration of the costs, risks, and benefits. For this reason, we encourage you to contact Weiss LLP should you have any questions or concerns.