If you haven’t already applied for a PPP loan, don’t panic, there’s still time. The new deadline is now March 31st, 2021. However, businesses that were not in operation as of February 15th, 2020, are not eligible to receive these loans.
As companies go into the new year, budgets have been made and expenses totaled. You’re not alone if you’ve gone into 2021 a little strapped for cash. The good news is business owners now have a second chance with a new round of PPP loans. The new program has been put in place as several companies could not receive a PPP loan during last year’s Paycheck Protection Program.
More businesses than ever are now eligible for PPP loans thanks to The Economic Aid Act. The businesses include local news organizations, nonprofits, and chambers of commerce. Take a look at the information below to make sure you meet the requirements of an “eligible entity.”
The loan is going to businesses that require the loan as a necessity. Here a ways to know if you’re eligible for the PPP Loan:
- You’ve experienced a 25% reduction in revenue through one quarter of 2020.
- If this is your second round of PPP, you can only have a max of 300 employees. If this is your first time, the limit rises to 500.
- You need to document a reduction in gross receipts if you’re borrowing more than $150,000. The easiest way to do this will be to submit tax returns between 2019 and 2020 if you have them available.
- If you’ve had closures due to COVID that were only temporary and did not result in permanently closing your doors.
- If you received the 2020 PPP loan, you have used, or will use, the full amount of the First Draw PPP Loan.
Aside from these terms and conditions, round two of the PPP loans remain the same. You don’t need collateral, and these loans are 100% guaranteed by the federal government.
If this is your first time applying, you will need to have documentation gathered to apply, those documents being your payroll costs and revenue reduction. If this is your second time applying for a PPP loan, and you’re applying for loans less than $150,000, you won’t have to submit any new documents if you’re using the same lender. However, a lender may ask you for additional documentation.
The new rules for PPP loan forgiveness can be confusing for business owners. If you would like additional information on PPP loans, please reach out to me. We’ll be able to provide you with all the information you need and ensure it’s easy to understand.