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New Paycheck Protection Program Details:

Round Two of the Paycheck Protection Program is here. This round of PPP funding includes positive changes that expand program eligibility and provides added benefits for businesses. And, if you received a PPP loan last year, you can apply for another one.

It’s important to apply for this round of PPP funding as soon as possible, as PPP funding is limited compared to last year.

You may qualify if:

  • You are a first or second time borrower
  • Have 300 or fewer employees
  • Sustained a 25% drop in revenue in any quarter of 2020
  • Used the full amount of your first PPP loan (if applicable)
  • New in 2021: Some 501(c)(6)s, destination marketing organizations (DMOs), housing cooperatives, newspapers, broadcasters, and radio stations are now also eligible for funding

Eligible expenses include: 

  • Covered operations (software, cloud computing, and other human resources and accounting needs)
  • Property damage costs due to public disturbances that occurred during 2020 that are not covered by insurance
  • Covered supplier costs
  • Covered worker protection expenditures (PPE)

Loan amount:

The maximum loan amount is 2.5 times (or 3.5 times if your business NAICS code begins with a 72) the average monthly payroll based on your 2019 calendar year, with a maximum loan amount of $2 Million.

Loan forgiveness:

A simplified forgiveness application process is now available for loans that are $150,000 or less. Those who borrow $150,000 or less should submit a certification letter to their financial institution that includes:

  • 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.
  • The total amount of the loan.

Eligibility for full PPP loan forgiveness is contingent on whether borrowers spend no less than 60% of PPP funds on payroll over a covered period of either eight or 24 weeks.

The covered period for all first draw loans is extended to March 31, 2021 and is retroactive to the start of CARES. Borrowers may choose the end of their forgiveness covered period between 8 and 24 weeks after the loan origination.

 

Additional PPP changes:

  • Economic Injury Disaster Loan (EIDL) Advance Change: This eliminates the requirement that recipients of EIDL advances have their PPP forgiveness amount reduced. The bill also clarifies that this change is retroactive to the start of CARES and requires the SBA to make borrowers whole if they have already received forgiveness and the EIDL Advance was deducted from that amount.
  • EIDLs may be refinanced with a first or second draw PPP loan.
  • Business expenses paid with forgiven PPP loans are tax-deductible.
  • Businesses that received a PPP loan in 2020 may be eligible to request an increase. 

For additional information:

For further resources and access to the PPP application visit the US Department of the Treasury page here, or the Small Business Administration page here.

We will continue to communicate program updates as we get additional information on the program from the SBA. In the meantime, please contact your banker if you have questions or need more information.