Instead, the borrower may choose any length of time between 8 weeks and 24 weeks after the origination of the loan.įor loans made on or after the date of the PPP2 Act, the time period for determining that no reduction in forgivable payroll costs is required based on the inability to rehire an employee or hire a comparable new employee, or to return to previous level of business activity due to COVID-related government requirements, is moved from Decemto “the last date of the borrower’s selected covered period.”įor borrowers of PPP loans that as of the date of the PPP2 Act have not received forgiveness and the borrower returned amounts disbursed under its original PPP loan, the borrower may now apply for a new loan equal to the difference between the amount retained and the maximum amount applicable. For loans where forgiveness is given after the date of the PPP2 Act, the borrower is not limited to a choice of 8 weeks or 24 weeks for the covered period for which it seeks forgiveness. To be eligible for a PPP loan, an entity must have been in operation on February 15, 2020. This applies to any present or future PPP loan, even if forgiveness has already been granted. Given that the applicant will now have been operating for several months during the COVID pandemic, care should be taken by the applicant to be certain it can establish that economic necessity.Īnd, because the IRS said it would tax the forgiveness amounts as income, the PPP2 Act takes care of that, saying that expenses for any amount of a PPP loan forgiven is tax deductible, even if excluded from gross income. – Has at least a 25% reduction in gross receipts in a quarter in 2020 as compared to the same quarter in 2019.Īs with the original PPP loan, a borrower seeking a Second Loan must certify that economic uncertainty makes the loan request necessary to support ongoing operations. ![]() – Meets the annual receipts requirements for PPP borrowers generally – Has used or will use on or before the expected date of the disbursement of the Second Draw Loan the full amount of the original loan Second Loans are available to any business concern, nonprofit organization, veterans organization, Tribal business concern, eligible self-employed individual, sole proprietor, independent contractor, or small agricultural cooperative that: And the total amount of loans a borrower (including affiliates) may receive as an original PPP loan and as a Second Loan in any 90 day period is $10 million. The borrower may have only 300 total employees, as opposed to 500 employees under the rules for an original PPP loan. The maximum total loan amount is the lesser of $2 million or at the election of the borrower, either (1) the average total monthly payment for payroll costs incurred or paid during the 1-year period before the date on which the loan is made or (2) calendar year 2019 multiplied by 2.5. Many of the requirements are the same as the original PPP loan. PPP borrowers may apply for one Second Loan. – Loan forgiveness process is simplified for borrowers with PPP loans of $150,000 or less. – Borrowers may apply to obtain loan amounts they had previously returned or had not taken. ![]() – EIDL grants no longer reduce the allowed forgiveness amount of PPP loans. ![]() – Business expenses paid for with the proceeds of PPP loans are tax deductible, consistent with Congressional intent in the CARES Act. – Forgivable expenses are expanded to include supplier costs and investments in facility modifications and personal protective equipment to operate safely. Eligibility is limited to small businesses with 300 or fewer employees that have sustained a 25 percent revenue loss in any quarter of 2020. – Funding to allow the hardest-hit small businesses to receive a second forgivable PPP loan (Second Draw Loan). On December 27, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (“PPP2 Act”) came into law, changing rules for Paycheck Protection Program (“PPP”) loans, including making a supplemental PPP loan available to many PPP borrowers and increasing the types of business expenses that can be forgiven.Īmong many other changes discussed in detail below, the PPP2 Act provides the following key changes to the PPP program: Please note the Eligibility for a loss in revenue is 25 percent for any quarter of 2020. PPP LOANS – ROUND 2 - Please note the Eligibility for a loss in revenue is 25 percent for any quarter of 2020.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |