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FAQ's

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PPP 2.0

Who Can Apply for A PPP Loan?
I Already Took A PPP Loan During the Last Round of Funding. Can I Get A Second PPP Loan?
What Are the Eligibility Requirements for These PPP Loans?
Can A Second Draw PPP Loan Be Forgiven?
What Is the New, Simplified Loan Forgiveness Application?
How Much Money Can I Receive?
What Counts as Eligible Expenses to Spend My PPP Funds On?
How Long Do I Have to Spend the Money?
What are the New Rules Regarding Tax Deductions?

PPP VS EIDL

Can I apply for both the PPP and EIDL?
Are expenses paid with these loans taxable?
Can I accept just the forgivable $10,000 EIDL Advance Grant and not the EIDL?

PPP Loan Forgiveness

What Does PPP Loan Forgiveness Mean?
When Can I Apply for PPP Loan Forgiveness?
What is the Covered Period?
Can Both First and Second Draw Loans Be Forgiven?
How Do I Qualify for PPP Loan Forgiveness?
What If I Don’t Qualify to Have My PPP Loan Forgiven?
What Documents Will I Need to Provide?
How Do I Submit My Forgiveness Application?

Who Can Apply for A PPP Loan?

PPP loans will be available to first- and second-time borrowers who meet the eligibility requirements set forth in the bill. Small businesses, non-profits, and independent contractors are all eligible to apply. In addition, for the first time since the start of the program, 501(c)(6) nonprofits, including destination marketing organizations, local newspapers, and TV and radio broadcasters are now eligible to apply.

I Already Took A PPP Loan During the Last Round of Funding. Can I Get A Second PPP Loan?

Yes! Even if you already received a PPP loan during the first stimulus bill, you are eligible to take an additional loan for your business. You may have heard this referred to as a “PPP Second Draw” or simply a “Second Draw”.

What Are the Eligibility Requirements for These PPP Loans?

If you already took a PPP loan during the first stimulus bill, you have to meet the following requirements as a second-time PPP borrower to secure another loan for your business:

You must have been in business as of February 15, 2020.
Must have less than 300 employees
Must show at least a 25% drop in quarterly revenue in either Q1, Q2 or Q3 of 2020, compared to the same quarter in 2019
Business that got a first PPP loan must have used, or plan to use, their full PPP loan already received.

Can A Second Draw PPP Loan Be Forgiven?

Yes. But for full forgiveness you must spend 60% of your loan amount on payroll costs.

What Is the New, Simplified Loan Forgiveness Application?

A new, simplified one-page forgiveness application will be released shortly. This form will be available for PPP loans of $150,000 or less from both the first round of the stimulus package and the second one.

How Much Money Can I Receive?

Under the new law, the maximum amount of each PPP loan is $2 million. The exact loan amount will be determined by calculating a business’s average total monthly payroll costs multiplied by a factor of 2.5%. Businesses with a NAICS code beginning in 72 (generally hospitality businesses) may receive up to 3.5 times average monthly payroll cost.

What Counts as Eligible Expenses to Spend My PPP Funds On?

In order to qualify for full PPP loan forgiveness, you must spend a minimum of 60% of your funds on payroll. The remaining 40% can be spent on eligible expenses such as:

Rent
Utilities
Operating costs including cloud computing, human resources, or inventory management
Mortgage interest
Covered supplier costs
Property damage costs due to looting or vandalism during the events of 2020
PPE expenditures to protect employees

How Long Do I Have to Spend the Money?

Businesses have 24 weeks from receipt of the loan to spend the funds.

What are the New Rules Regarding Tax Deductions?

Under the new stimulus bill, PPP loans will no longer be counted as taxable income. This change is for new and existing PPP loans and will mean that the expenses paid with a PPP loan are also tax-deductible. In addition, PPP loans that have already been forgiven will no longer count as taxable income. We recommend consulting with a CPA for more information.

Can I apply for both the PPP and EIDL?

Yes, you can apply for both the PPP and the EIDL, but you are not allowed to double dip. This means that you cannot use funds received for the same purpose. Also, the SBA explains, “businesses that receive an EIDL Advance in addition to the PPP loan will have the amount of the EIDL Advance subtracted from the forgiveness amount of their PPP loan”.

Are expenses paid with these loans taxable?

You are allowed to deduct eligible expenses paid with both PPP and EIDL funds and the amount you receive is not taxable.

Can I accept just the forgivable $10,000 EIDL Advance Grant and not the EIDL?

Yes. According to the SBA, “A small business can apply for an EIDL loan and later elect not to “close” or accept that loan. If they requested and received an EIDL Advance (by checking the request box within the EIDL loan application), that amount does not need to be repaid. There would only be a balance due if they accepted the full amount of the EIDL loan.”

What Does PPP Loan Forgiveness Mean?

The PPP was primarily designed to incentivize business owners to keep their employees on payroll. Once you receive your PPP loan and spend the full amount (with at least 60% of that amount being used for payroll costs), you are eligible to apply to have your loan forgiven—meaning you are no longer required to repay it.

When Can I Apply for PPP Loan Forgiveness?

You can apply for forgiveness once you’ve used the full amount of your PPP loan up to the maturity date of the loan. According to the SBA, “if borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender”.

What is the Covered Period?

The SBA defines the “Covered Period” as “the date the loan was originally disbursed. It ends on a date selected by the Borrower that is at least 8 weeks following the date of loan disbursement and not more than 24 weeks after the date of loan disbursement.

For example, if the Borrower received their PPP loan proceeds on Monday, April 20, 2020, the first day of the Covered Period is Monday, April 20, 2020 and the final day of the Covered Period is any date selected by the Borrower between Sunday, June 14, 2020 and Sunday, October 4, 2020.”

Can Both First and Second Draw Loans Be Forgiven?

Yes, both First Draw and Second Draw PPP loans can be forgiven. The forgiveness requirements are the same for both loans.

How Do I Qualify for PPP Loan Forgiveness?

In order to qualify for full PPP loan forgiveness, you must spend a minimum of 60% of your funds on payroll. The remaining 40% can be spent on non-payroll eligible expenses.

Payroll Costs (60% of loan amount):

Salary, wages, commissions, bonuses, and tips (Note: you cannot include any compensation in excess of $100,000 per employee.)
Payment for retirement benefits
Allowance for dismissal or separation
Payment for time off for vacation, family leave, and medical leave
Payment of state and local tax associated with the compensation of employees.
Costs for group healthcare benefits such as vision, dental insurance, or disability

Non-Payroll Eligible Expenses (40% of loan amount):

Rent
Utilities
Operating costs including cloud computing, human resources, or inventory management
Mortgage interest
Covered supplier costs
Property damage costs due to looting or vandalism during the events of 2020
PPE expenditures to protect employees

What If I Don’t Qualify to Have My PPP Loan Forgiven?

In the new stimulus package that was passed, a stipulation was included that states that those businesses that did not receive forgiveness of their PPP loans can now claim a tax credit. We recommend consulting with your accountant for more information.

What Documents Will I Need to Provide?

In addition to the loan forgiveness application, you’ll need to provide certain documentation as proof of how your PPP funds were spent.

For Payroll Expenses You May Need:

Bank account statements
Third-party payroll service provider reports showing the amount paid to employees
Tax forms
Any documentation that shows the amount of employer contributions to employee health insurance and retirement plans if you’ve included these in your PPP loan calculations

For Non-Payroll Expenses You May Need:

Proof of business mortgage interest payments
Proof of rent or lease payments
Proof of utility payments
Receipts for covered expenses such as PPE expenditures for employees or supplier costs

How Do I Submit My Forgiveness Application?

Contact your lender directly to verify which forgiveness application form you need to fill out. Your lender will guide you through the process and help you figure out which documents you need to provide along with the forgiveness application.

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