PPP2 Opens January 19th…Are You Ready?January 18, 2021
Lending Institutions will begin accepting applications for 2nd round draws of Paycheck Protection Program (PPP2) funds starting January 19th 2021. Here’s what you should know.
The recently enacted COVID-19 relief package establishes a second round of PPP loans. Eligible borrowers can begin submitting applications Tuesday, January 19th. What should you know about PPP2? We cover the details of eligibility and the application process below.
What is PPP2?
Due to ongoing challenges presented by the pandemic, the new relief legislation establishes a second round of Paycheck Protection Program (PPP) loans. We cover initial FAQs in our blog, PPP2 Application FAQs, but here are some things you should be aware of as you apply.
What businesses are eligible?
The $284 billion PPP2 package offers relief to the following:
2nd time applicants-
- Small businesses with 300 or fewer employees
- Special rule for multi location restaurants/hospitality
- Those who have spent or will spend the full amount of their original PPP loan
- Those who can demonstrate a 25 percent revenue loss in any quarter of 2020 vs. the same quarter in 2019 (or annual reduction of 25% reduction 2019 vs. 2020).
How much do the loans offer?
Loans are based on 2.5 months of average eligible monthly payroll costs (2019 or 2020), and will now be subject to a maximum loan amount of $2MM. ($4MM for affiliated groups); Seasonal employer rules do exist.
Businesses with NAICS codes starting with 72 (hotels and restaurants) qualify for larger loans. Instead of being limited to 2.5 months of average monthly payroll costs, they will be eligible for loans up to 3.5 months their average monthly payroll costs (subject to the $2 million dollar loan limitation)
Are the allowable uses for PPP2 the same as PPP?
The allowable uses for PPP funds have now been expanded. In addition to eligible payroll costs, mortgage interest, rent and utility payments, borrowers can use the funds to pay for covered:
- Operating expenses,
- Supplier costs, and
- PPE and other costs related to worker protection and facility modifications.
- Property damage costs
What is the covered period?
The Covered Period is ANY period between 8 and 24 weeks and the 60% minimum requirement spend for payroll costs is still required.
As you navigate through the application, let us know if you run into any challenges. We’re always here to help!
Check out our PPP Headquarters.