Second Round Paycheck Protection Program (PPP) and additional funds for the EIDL
The recent U.S. Government’s COVID-19 relief package for small businesses includes several paths you can take to access for funding. We will continue to update on how this develops but for now we will focus on the second round for the Paycheck Protection Program (PPP) and additional funds for the EIDL (Economic Injury Disaster Loan).
Paycheck Protection Program
The legislation includes $284 billion for the PPP and extends the program through March 31, 2021. Below are questions you might be looking to answer:
1. If I already got a PPP loan, can I apply again?
YES, the new program provides for a second PPP loan of up to $2 million for smaller businesses that:
- Have no more than 300 employees.
- Demonstrate a loss of 25% of gross receipts in any quarter during 2020 when compared to the same quarter in 2019.
- Have used the full amount of their first PPP before a second loan is disbursed.
2. Are more businesses eligible this time?
YES, and YES, even independent contractors are eligible for PPP loans. 501(c)(6) nonprofits were included this time, as well.
3. How much money am I entitled to?
In general, borrowers may receive a loan amount of up to 2.5X the average monthly payroll costs in the one year prior to the loan or the calendar year. No loan can be greater than $2 million. Here are some of the details:
- Seasonal employers may calculate their maximum loan amount based on a 12-week period beginning February 15, 2019 through February 15, 2020.
- New entities may receive loans of up to 2.5X of average monthly payroll costs.
- Entities in Accommodation and Food Services industries may receive loans of up to 3.5X average monthly payroll costs.
- Businesses with multiple locations that are eligible entities under the initial PPP requirements may employ not more than 300 employees per physical location. Each location must have its own Tax ID or EIN
- An eligible entity may only receive one PPP second draw loan.
- Fees are waived for both borrowers and lenders to encourage participation.
- For loans of not more than $150,000, the entity may submit a certification attesting that the entity meets the revenue loss requirements on or before the date the entity submits their loan forgiveness application.
ECONOMIC INJURY DISASTER LOAN (EIDL)
$20 Billion in additional targeting funding is being made available through the EIDL advance program. The bill makes entities in low-income communities, as defined by the Internal Revenue Code (TBD case by case), that received an EIDL Advance to receive an amount equal to the difference of what the entity received under the CARES Act and $10,000. In easy words: if you qualify as part of a low-income community and received an advance loan of less than $10,000, you will receive the difference ($10,000 minus $X previously received).
It also provides $10,000 grants to eligible applicants in low-income communities that did not secure grants because funding had run out.
If you need help with the application do not hesitate to contact Oropel Accounting and Tax P.A. for further information.
