PPP 2 Loans & Small Business Support

Paycheck Protection Program (PPP) Loans & Small Business Support

The legislation includes over $300 billion for first and second forgivable PPP loans. Unlike the prior loan program, this round will truly be limited to small businesses that incurred a loss of revenue. Eligibility is limited to:

• Businesses with 300 or fewer employees that have sustained a 25% revenue loss in any quarter of 2020 as compared with the same period in 2019.
• Small 501(c)(6) organizations that are not lobbying organizations and that have 150 employees or fewer, such as local chambers of commerce, economic development organizations, and tourism offices.
• Certain 501(c)(6) nonprofits and Destination Marketing Organizations with 300 or fewer employees that do not receive more than 15 percent of their revenue from lobbying.
• Local newspapers and T.V. and radio stations previously made ineligible by their affiliation with other stations. Forgivable Expenses – will be expanded to include covered (COVIDTRA Sec 304):
• Payroll costs – Including additional group insurance payments, including vision, dental, disability and life insurance.
• Operational Costs
• Property Damage Costs
• Supplier costs on existing contracts and purchase orders, including the cost for perishable goods at any time.
• Investments in facility modifications and personal protective equipment needed to operate safely and technology operations expenditures.

The term ‘covered supplier cost’– Means an expenditure made by an entity to a supplier of goods for the supply of goods that –

• Are essential to the operations of the entity at the time at which the expenditure is made; and
• Is made pursuant to a contract, order, or purchase order
• In effect at any time before the covered period or
• With respect to perishable goods.

The term ‘covered worker protection expenditure’— Means an operating or a capital expenditure to facilitate the adaptation of the business activities of an entity to comply with requirements established or guidance issued by Federal, State and local governments during the period beginning on March 1, 2020 and ending the date on which, the national emergency related to COVID-19 declared by the President expires. NOTE: The legislation includes a long list of examples of what does and does not apply.

The term ‘covered operations expenditure’ – Means a payment for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses.

The term ‘covered property damage cost’ – means a cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation.

Loan Size – Establishes a maximum loan size of 2.5 times the average monthly payroll costs, up to $2 million.

• Allows small businesses assigned to the industry NAICS code 72 (Accommodation and Food Services) to receive PPP second draw loans equal to 3.5 times their average monthly payroll costs in order to help these businesses combat onerous State and local restrictions.
• Maintains existing expansions in eligibility for businesses assigned to the industry NAICS code 72 (Accommodation and Food Services).

Loan Forgiveness – Full loan forgiveness is available if the borrower spends at least 60% of the second draw on payroll costs over either an 8-week or 24-week period selected by the borrower.

Simplified Loan Forgiveness – The loan forgiveness process is simplified for borrowers with PPP loans of $150,000 or less. (This means another version of the SBA’s loan forgiveness application form will be forthcoming.)

If you have questions about PPP2 or need assistance understanding the requirements, determining if you’re eligible, finding the best place to apply for the loan we can help!  Schedule a quick 15 minute call using the button below to get started!