Paycheck Protection Program

 

In December 2020, Congress approved another round of stimulus funds towards the SBA Paycheck Protection Program. This is to help small businesses that have been hurt due to COVID-19. If your revenues were reduced during 2020, then you are likely eligible for a forgivable loan equal to at least 2.5 times your monthly payroll, or income as a sole proprietor, even if you already secured a loan in the previous round.

Who We Are and How We help

We are a commercial loan broker with relationships with dozens of lenders. We have partnered with a very strong Preferred Lending Partner of the SBA to help small businesses of all sizes get PPP loans. We provide personal service and stand ready to help small businesses get their maximum share of this package. When you are ready to get your application in line for these funds, complete and submit the form below. This information tells us which application is right for you and which calculation method to use in order to maximize your loan amount. We will follow up with a call or email with instructions for the next step in the process.

 

The Journal of Accountancy provides this excellent in-depth explanation of the new package provisions:

Who is eligible to apply

PPP2 loans will be available to first-time qualified borrowers and, for the first time, to businesses that previously received a PPP loan. Specifically, previous PPP recipients may apply for another loan of up to $2 million, provided they:

  • Have 300 or fewer employees.
  • 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.

PPP2 also makes the forgivable loans available to Sec. 501(c)(6) business leagues, such as chambers of commerce, visitors’ bureaus, etc., and “destination marketing organizations” (as defined in the act), provided they have 300 or fewer employees and do not receive more than 15% of receipts from lobbying. The lobbying activities must comprise no more than 15% of the organization’s total activities and have cost no more than $1 million during the most recent tax year that ended prior to Feb. 15, 2020.

PPP2 will also permit 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 bill allows borrowers that returned all or part of a previous PPP loan to reapply for the maximum amount available to them.

PPP loan terms

As with PPP1, the costs eligible for loan forgiveness in PPP2 include payroll, rent, covered mortgage interest, and utilities. PPP2 also makes the following 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.

To be eligible for full loan forgiveness, PPP borrowers will have to spend no less than 60% of the funds on payroll over a covered period of either eight or 24 weeks — the same parameters PPP1 had when it stopped accepting applications in August.

PPP borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs in the year prior to the loan or the calendar year, the same as with PPP1, but the maximum loan amount has been cut from $10 million in the first round to the previously mentioned $2 million maximum. PPP borrowers with NAICS codes starting with 72 (hotels and restaurants) can get up to 3.5 times their average monthly payroll costs, again subject to a $2 million maximum.

Simplified application and other terms of note

The new COVID-19 relief bill also:

  • Creates a simplified forgiveness application process for loans of $150,000 or less. Specifically, a borrower shall receive forgiveness if a borrower signs and submits to the lender a certification that is not more than one page in length, includes a description of the number of employees the borrower was able to retain because of the loan, the estimated total amount of the loan spent on payroll costs, and the total loan amount. The SBA must create the simplified application form within 24 days of the bill’s enactment and may not require additional materials unless necessary to substantiate revenue loss requirements or satisfy relevant statutory or regulatory requirements. Borrowers are required to retain relevant records related to employment for four years and other records for three years, as the SBA may review and audit these loans to check for fraud.
  • Repeals the requirement that PPP borrowers deduct the amount of any EIDL advance from their PPP forgiveness amount.
  • 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 lenders.

Where to Apply

Any SBA approved lender, whether a bank or a non-bank, can participate in the PPP loan program. However, not all do. In addition, the majority of lenders who participate only accept applications from their current customers. That leaves thousands of small businesses in the cold. Here at Future Point Capital we have searched out those lenders accepting loans from any business and can help you connect to the best choice for your PPP loan.

The rules can be a little confusing so in order to get your money fast, you need someone who understands how to calculate your maximum PPP loan amount quickly. We helped many in the last round and are ready to help you. Complete the form above or give us a call today to get your loan application in the queue.