Let’s talk about the second round of PPP loans. As you know, this program was extended in the Covid Relief Act passed just after Christmas, and this is more relief money for businesses that are hurting. There are informative articles about this everywhere, but this one from The Business Journals is about what the SBA has said.
Last time, there was all kinds of information running around about the program, and a lot of it just turned out to be incorrect, so according to the SBA if you have not applied for your the first PPP loan, you can still do that. There was money that was never used. That program never got completed or exhausted. That’s what they’re calling “first draw” loans. Today, we’re referring to the second draw as PPP 2.0, but you can still do the first.
Your first draw alone can now be calculated on 2019 or 2020 payroll data. The first round when we all did it back in the spring was mainly done on 2019 data, but that was early in the year. Now 2020 is closed, and you can use 2020 data if you wish. Small businesses that are temporarily closed or suspended or not allowed to open, can absolutely apply for this loan. In fact, you are who this program is targeted to, so do not hesitate. Apply for this loan! If you use the same lender for PPP 2.0 as you did for 1.0, you can use the same basis and payroll period and you won’t even have to turn over any new documents. What you do have to show is, for any quarter in 2020, that you had a 25 reduction in revenue. That’s not as deep as we all thought it was going to be, but a 25 percent reduction is definitely a decline in revenue, and if you can demonstrate that from any quarter in 2020, then you will then you will qualify for PPP 2.0. This time the SBA has said they’re going to give some preference early on to community banks and smaller institutions, so the larger institutions don’t overwhelm the system while they’re working out the kinks.
If you don’t have a lender that that you’re close with, get in touch with us! We can put you together with a group that is processing these loans for any business. There’s no reason not to do it. If there’s any way we can help you with this, just let us know!