How to Qualify for the “Second Draw” PPP Loans of up to $2 Million
On December 27, 2020, the Consolidated Appropriations Act (The Act) was signed into law in order to provide further stimulus and support to organizations and individuals affected by the COVID-19 pandemic. We’ve created the below information to help understand and streamline the qualification and application process.
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“SECOND DRAW” PPP
Loans up to $2 Million! Are now open to apply!
On December 27, 2020, the Consolidated Appropriations Act (The Act) was signed into law in order to provide further stimulus and support to organizations and individuals affected by the COVID-19 pandemic
When should it be filed?
The loan application must be filed by March 31st, 2021. Businesses are advised to apply for the PPP loans AS SOON AS POSSIBLE since appropriated funds are limited. The Small Business Administration and/or lenders may delay the opening of the program for several weeks to develop new forms and instructions
Second Draw Loans Available – How do you Qualify?
The initial loans are available to new borrowers with 500 or fewer employees and subsequent (“Second Draw”) PPP loans of up to $2 million
- Available to organizations with 300 or fewer employees
- Revenue declines of 25 percent or more in any quarter of 2020compared to the same quarter of
- A borrower must have used (or will use) the full amount of the first PPP loan on or before disbursement of the Second Draw loan.
Borrowers may receive a loan amount of up to 2.5 times the average monthly payroll costs in the one year prior to the loan or calendar year 2019, up to $10 million (up to $2 million for Second Draw loans). Business Accommodation and Food Services industries (NAICS code 72) may qualify for PPP Loans of 3.5 times average monthly payroll costs, up to the applicable cap.
365BOOKSPRO will assist both borrowers and lenders with the necessary verification for PPP loan forgiveness. 365BOOKSPRO will work closely with borrowers to assist them to maximize their loan forgiveness benefits.
- PPP Loan Funds PlanningAssist with proper documentation that is required and relevant to the loan application. Other requirements such as allocating forgiveness funds to ensure accurate accountability with spending to appropriate loan forgiveness.
- Loan Forgiveness TrackingWe work closely with you to monitor and provide financial reports & documentation in order to be audit compliant with your lender.
- Financial Documentation & Reporting365BOOKSPRO team will provide you with superior borrower documentation and assist all the necessary procedures in order to be compliant
ALLOWABLE & FORGIVBLE EXPENSES
- Forgivable expenses now include supplier cost and investments in facility modifications and personal protective equipment to operate safely, including the following;
- Business software or cloud computing service that facilitates operations, including payroll and human resources systems to facilitate processing and tracking; and similar software and services for sales, billing, accounting, and/or tracking of supplies, inventory, records, and expenses.
- Certain property damage costs related to public disturbances that occurred during 2020 that was not covered by insurance or other compensation.
- Certain supplier costs pursuant to a contract or order that was in effect before the date of disbursement of the covered loan for the supply of goods that are essential to the operations of the entity at the time at which the expenditure is made; and
- Worker protection expenditures that were required to facilitate the adaptation of the business activities of an entity to comply with government restrictions related to COVID–19, such as drive-through window facilities, ventilation or filtration systems, physical barriers, and health screening facilities to comply with government guidance.
- The Act clarifies that “other employer-provided group insurance benefits,” such as life insurance, are included in payroll costs.
- Loan proceeds cannot be used for lobbying activities, including any lobbying expenditures related to state or local campaigns.
Simplified Application for loans under $150,000
Borrowers are not required to submit documentation but must sign and submit a one-page form issued by the Small Business Administration (SBA) to attest in good faith to comply with the PPP loan requirements and report the number of employees retained, loan proceeds spent on payroll, and non-payroll costs.
Important: Borrowers must retain relevant related records to employment for four years.