New federal stimulus legislation was approved on December 27. The legislation includes another round of funding for PPP (Paycheck Protection Program) loans for small business affected by the COVID-19 pandemic.
Banks are awaiting detailed guidelines from the Small Business Administration, which administers these loans. Here is a summary of what we know. Please bear in mind that this information is subject to change in the coming weeks.
What businesses are eligible for second PPP loans?Small businesses with 300 or fewer employees that have had a 25% revenue loss in any quarter of 2020 compared to the same quarter in 2019 are eligible.
What is the maximum loan amount?The maximum amount for a second loan is $2 million.
What expenses are forgiveable?In addition to the expenses allowed in the original loan (payroll, rent, utilities), you can spend the funds on supplier costs, facility modifications for COVID-19 safety, and personal protective equipment. These new forgiveable expenses are NOT retroactive to the original PPP loan program.
I have a PPP loan now. What do I need to know?You must spend the full amount of the first PPP loan before you can receive funding for a second loan. You might qualify for more funding than you qualified for in the original loan.
I did not get a PPP loan before. Can I apply now?Yes, if you meet the new eligibility requirements.
Contact your bank for instructions regarding funding and/or loan forgiveness applications, as each bank has a different process.