As of January 8, 2021, you need to contact your lender about applying for PPP2 [Paycheck Protection Program] funds.
Don’t wait!
We gathered this information from various sources*, so please check with your accountant or lawyer for confirmation or clarification of the following information.
Important Information regarding PPP2 funds:
- If you didn’t get PPP1, you are still able to get PPP2 funding.
- PPP2 is only available to organizations with under 300 employees (dropped from 500).
- You must have used all your PPP1 funds (if you received them).
- You will need to show a 25% reduction in at least one quarter of 2020 compared to 2019.
- 501(c)(3) can be split. For example, a church and school under the same 501(c)(3).
- The last day to apply currently is March 31, 2021. (As with PPP1 this will most likely move).
- If you’re using the same lender, you can use the same documentation as submitted for PPP1. You will need to check with your lender as additional information may be requested.
- There is a new application for loans under $150K (yet to be released).
Forgiveness:
- Forgiveness for PPP2 funds will be the same as PPP1, but additional guidelines will be forthcoming.
- You must use at least 60% of the loan for payroll costs (employer-paid amounts only) within 8-24 weeks of receiving a loan or there will be a reduction in forgiveness.
- Payroll costs include compensation, wages, group health insurance, housing allowance, state and local taxes, as well as paid sick leave.
- You can use the other 40% on:
- Covered operational expenditures: Payment for any software, cloud computing, and other human resources and accounting needs.
- Covered property damage: If it relates to public disturbances that occurred in 2020 and were not covered by insurance.
- Covered worker protection expenditures: PPE [personal protective equipment] and adaptive equipment/investments to help a loan recipient comply with federal health and safety guidelines or equivalent state and local guidance related to COVID-19 during 3/1/2020 until the end of the national emergency declaration.
Download your quick checklist to ensure you follow the needed steps for getting PPP2 funds!
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*SBA.com, Journal of Accountancy and Vanderbloemen
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