Paycheck Protection Program: Round 2

Dec 29, 2020
Updated 1/12/2021
If you haven't heard, Sunday night President Trump signed into law the $900 billion COVID-19 relief bill "Consolidated Appropriations Act" which provides $300 billion in support for small businesses and an opportunity to apply for a second PPP loan (or first loan if you missed the first round of PPP loans). This also includes Sec. 501(c)(6) not-for-profit organizations that were not able to apply previously.
According to a report by the SBA , accountants played a significant role in assisting small businesses with securing $525 billion in forgivable loans over 5 months the application was open for PPP1. Our companion business BRW Tax & Accounting is thrilled to have been a part of that and helped so many of you! Now is our opportunity to support the small business community again with the "PPP2".
Guidance and regulations have not been issued yet, but the SBA must provide regulations within 10 days of the enactment of the Act. This means, applications aren't open yet, but should be open the first week of January.
 Applications are now open! (Links below)
Now is the time to prepare and gather the necessary documents for your bank so you are ready to roll on day 1.
We have been very fortunate to partner with the Pikes Peak Small Business Development Center (SBDC) to stay close to today's ever-changing business environment. They are the premier resource for all of your financial and operational considerations. If you haven't had a chance to check out their Covid-19 resource page, check it out HERE.
Here's the breakdown:
  • The bill provides more than $284 billion to the U.S. Small Business Association (SBA) for first and second PPP forgivable small business loans
  • PPP borrowers can receive a loan 2.5 times their average monthly payroll costs prior to the loan or calendar year up to a $2 million maximum
  • Hotels and restaurants can receive up to 3.5 times their average monthly costs up to a $2 million maximum (OR can benefit from the $15 million in dedicated grants but can't do both)
  • Includes set-asides to support first- and second-time PPP borrowers with 10 or fewer employees, first-time PPP borrowers that have recently been made eligible, and for loans made by community lender
  • Allocates $20 billion to provide Economic Injury Disaster Loan (EIDL) Grants to businesses in low-income communities
  • Shuttered live venues, independent movie theaters, and cultural institutions will have access to $15 billion in dedicated funding while $12 billion will be set aside to help business in low-income and minority communities
  • $166 billion for economic impact payments of $600 for individuals making up to $75,000 per year and $1,200 for married couples making up to $150,000 per year, as well as a $600 payment for each child dependent
  • $120 billion to provide workers receiving unemployment benefits a $300 per week supplement from Dec. 26 until March 14, 2021
  • $25 billion in emergency rental aid and an extension of the national eviction moratorium through Jan. 31, 2021
Who is eligible to apply:
  • Businesses with 300 employees or less
  • Have used or will use the full amount of their first PPP loan
  • Can show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019
  • First-time borrowers from the following groups:
  • Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans.
  • Sole proprietors, independent contractors, and eligible self-employed individuals.
  • Not-for-profits, including churches.
  • Accommodation and food services operations (those with North American Industry Classification System (NAICS) codes starting with 72) with fewer than 300 employees per physical location.
  • The lender isn’t going to be “made” to do these loans
  • The lender can say NO to taking on the client
  • The lender can decide if they want to work with that client
  • The lender is there to decide if the client is really a viable business and if this loan and granted portion will actually help them survive
  • The lender SHOULD NOT sell the small business on any other of their programs by saying it’s a CONDITION of the loan. This is not true. If the borrower wants to do additional business with the bank…that’s their decision.
Forgiveness Loan Terms:
  • Same as PPP1 for payroll, rent, covered mortgage interest, and utilities
  • You will owe the money when the loan is due IF you use the proceeds for anything other than eligible costs (as listed above)
  • If you do what you are supposed to do:
  • Use the money for what you are supposed to use it for
  • Forgiveness of the principle of the 8-week or 24 week time frame if you show you used the loan for 60% or more on what you were supposed to use it for.
    Potentially forgivable:
  • Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines
  • Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations
  • Covered operating costs such as software and cloud computing services and accounting needs
  • Does not require borrowers to deduct the amount of any EIDL advance from their PPP forgiveness amount
  • The bill creates a simplified forgiveness application process for loans of $150,000 or less
Tax Deductibility
  • PPP loans will not be included as taxable income
  • The bill also specifies that business expenses paid with forgiven PPP loans are tax-deductible
Below we have some additional information on the PPP and other programs/ information that is available to you.
As always, if you have any questions, please feel free to reach out and we can assess your individual needs.
-Your geeks at HR Branches
Disclaimer: HR Branches provides general information about Human Resources. Please note that the information provided, while reliable, is not legal advice. Please seek legal assistance, or assistance from State, Federal, or International governmental resources, to make sure your legal interpretation and decisions are correct for your location and circumstances. The purpose of this information is for guidance, ideas, and assistance on general HR matters.
P.S. Please feel free to forward to anyone you know who could benefit from this information!
PPP Applications
EIDL Applications
Other Funding Options:
Upcoming Events:
Pikes Peak SBDC previously recorded webinars:
Additional Support:
SBA Economic Injury Loan Hotline 1-800-659-2955 or (TTY) 800-877-8339

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