It’s Time to Apply for PPP 2.0: Get Ready With This Checklist

The Paycheck Protection Program (PPP) has officially reopened. As of Monday, January 11^th,2021, first-time PPP borrowers were eligible to apply for the new round of PPP loans. Second-time PPP borrowers are eligible to apply as of Wednesday, January 13^th, 2021.

The latest press release from the Small Business Administration (SBA) and the Treasury Department, states that “this round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.”

In order to get your piece of the PPP pie while there’s still time, we’ve prepared the following checklist with useful steps to take now:

1. Gather These Important Documents

• Past 6 months of business bank statements

• Your (pre-pandemic) February 2020 bank statement or payroll pay stub

• Payroll Documents from 2019 or 2020  (940’s, 941’s, Schedule C’s, or 1099’s)

• bank statements showing a 25% drop in revenue in any one quarter of 2020 as compared to the same quarter’s bank statements in 2019.

• Example: You experienced a 25% decline in Q3 of 2020 as compared to Q3 of 2019.  Required documentation to prove this would be July, August, and Septembers Business Bank Statements from 2020 (Q3 2020), AND July, August, and Septembers Business Bank Statements from 2019 (Q3 2019)

• 2019 tax documents (Such as Form 1120, 1120-S, 941, 944, 1065, 1040, 1120, or 990)

• Driver’s license (Must be a color copy of the front and back)

• Voided check (From your business bank account).

2. Verify That Your Business Is Eligible

You are eligible for a Second Draw PPP Loan if:

• You were in business as of February 15, 2020

• You must have used, or plan to use the full PPP loan that you already received

• You have less than 300 employees

• Show at least a 25% drop in revenue in any quarter of 2020 compared to the same quarter in 2019.

You are eligible for a First-Time PPP Loan if:

• You were in business as of February 15, 2020

• You have less than 500 employees

• You are a self-employed individual, independent contractor, or sole proprietorships.

3. Be Aware of Key Loan Forgiveness Changes

• For full forgiveness you must spend 60% of your loan amount on payroll costs. With PPP 2.0, there is now an expanded list of eligible costs that qualify for the remaining 40%.

• The new eligible costs that have been added are:
  • 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

• There is now a simplified forgiveness process for borrowers with loans under $150,000.

Next Steps

For more information about how to apply for a PPP loan, click here.  Our COVID-19 Resource Center also has up-to-date information and helpful tips for business owners like this guide to PPP FAQs.

*SBG Funding is not a processor or lender for PPP loans. SBG Funding offers advisory services on a suite of commercial financing products and works with agents who specialize in helping small business owners looking to apply for PPP Loans. As part of our service, we are happy to refer you to these agents and help guide you through the process at no charge. You are not required to change your banking relationship to apply either!  PPP inquires made to SBG do not guarantee you will receive a PPP loan or be matched to a lender. We will be consulting on all relief options available until all allocated funds have been exhausted.