New PPP Loans Included In New Stimulus Pacakge
Update: Small businesses have 2 more months to apply for forgivable PPP loans. Read this post from CNBC for more details on the Stimulus Relief Package extension.
Update: Today, January 11, 2021 marks the first day that small businesses can apply for the second Paycheck Protection Program (PPP) Loans. This new stimulus package, called he Economic Aid Act, provides and additional $284 billion for small businesses.
Here is a list of guidelines you should be aware of as you apply for this new round of assistance:
- Lenders targeting underserved communities will have exclusive access to offer loans to new borrowers Monday and Tuesday. Only applications from community financial institutions will be accepted.
- Lenders will then be able to offer second loans to existing borrowers starting Wednesday, 1/13/21.
- Applications for all business owners close on 3/31/21.
- Businesses will calculate their maximum loan amount using payroll costs for a one-year period, using a date of their choosing in either the year 2019 or 2020.
- The maximum loan amount has been significantly reduced from $10 million to $2 million.
*This list was originally posted on Connected Commerce Council
According to The New York Times and The Philadelphia Inquirer, the federal relief bill that Congress passed today would provide much needed relief to struggling small businesses across a wide net of industries, including the Beauty salons and barbershops. It’s no secret that qualifying for a portion of the $284 billion Paycheck Protection Program (PPP) and Economic Injury Disaster Loans could mean the difference between survival and complete closure. In an effort to keep the economy going through the pandemic, the new bill has a number of changes to make sure as many businesses qualify for relief as possible.Some of the most notable changes are:
- Set-aside for small business, independent contractors and self-employed: $25 billion of the total allotment is earmarked for businesses with 10 employees or fewer as of Feb. 15, 2020.
- More eligible businesses can apply for PPP funding: Even if you got a PPP loan last time, you can apply again for a so-called “PPP2″ loan.
Previous PPP recipients can borrow up to $2 million, provided they have fewer than 300 workers and can show a 25% gross revenue decline in any 2020 quarter compared to the same quarter in 2019.
First-time PPP borrowers will be subject to the program’s original eligibility rules from March, so loans are available to businesses with 500 or fewer employees, and you don’t have to demonstrate a revenue loss.
- More expenses included in loan forgiveness. New eligible expenses may includeoperations, property damage costs, supplier costs, and worker-protection expenditures.
For more information on the PPP loans or for details on how to apply, visit Lendio.