Update 03/30/2021...
The PPP #2 deadline is 5/31/2021.  And that means that your loan must be in the hands of the SBA by that date. 

Update 02/23/2021...
LOANS FOR A SCHEDULE C TAXPAYER ARE NOW BASED ON GROSS INCOME RATHER THAN NET
Full details are not known yet.  This should result in much more PPP loan proceeds.  This is for schedule C filers only apparently.  Prior to this new development, a schedule C taxpayer would base a PPP loan on their Schedule C net income.  The breaking news is that now a Schedule C PPP loan will be based on GROSS INCOME (and no, I do not know if the Gross receipts are reduced by any expenses, including Returns and Allowances).


Update 01/20/2021...  PPP#1 forgiveness applications
  • More favorable terms are coming and an easier application for loans under $150k. 
    • ​Update...  the new forgiveness form is here, go ahead and apply now as long as your bank's form looks like this and requires signature only... click here.  
  • If you jumped the gun and already applied for forgiveness, you may have been denied forgiveness on an EIDL advance.  Call your bank and see if you can get your $1k+ back if you have already repaid.
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Small Business Emergency Loan
PPP#2 loans open 01/11/2021... Paycheck Protection Loan
  • Apply with an SBA lender by 03/31/2021.
  • SBA Task Force Hotline (888) 472-9778 or call your banker.
  • Should I do the PPP?  
    • For the 24 weeks (or reduced 8-23 weeks if elected) after the PPP loan date, you can only do one of the following Covid-19 benefits:
      • PPP loan (generally best if you can receive at least $14k)
      • PUA unemployment (best if you can collect more than the PPP available to you)
      • Special payroll tax credits (available if your 2021 quarterly sales are less than 80% of 2019 sales for same quarter; this can give up to $7k per employee per quarter).
  • ​Available to whom?​
    • all 1st time PPP applicants as long as have 500 or fewer employees or self-employed.
    • or previous PPP recipients (PPP second draw program)
      • if 300 or fewer employees
      • and have or will use full amount of previous PPP loan on qualifying expenditures
      • and can show a 25% gross sales revenue decline in at least one 2020 quarter compared to same quarter of 2019
        • PPP repeat applicants (second draw program)... You will need to supply quarterly sales info for 2019 and 2020.
    • All must certify that current or expected economic uncertainty resulting from Covid-19 makes this loan necessary to support current operations.
  • Law allows previous PPP borrowers who returned all or part of the loan to qualify for maximum  amount available.
  • How much can I receive?
    • Can borrow up to 2 .5 months of average payroll costs... based upon 2019 or 12 months prior to the loan.
      • ​You will need to supply 2019 payroll forms (2019 form 940, 2019 forms 941, 2019 payroll summary by employee)
      • Sole proprietors start with 2019 schedule C gross income
      • Partnerships start with 2019 self-employment income from form 1065.
      • Seasonal businesses can elect to use any 12 week periods between 02/15/19 and 02/15/20.
      • New businesses... can use 01/01/20 to 02/29/20.
    • However hotels & restaurants (NAIC codes starting with 72) can qualify for 3.5 months of average payroll costs.
  • Has potential to be forgiven!
    • Full forgiveness requires that at least 60% of the loan be used for payroll costs during the 24 weeks after the loan date.  Also can use any 8-23 weeks if more beneficial.
    • How can I use the money?     Other permissible uses of loan:  rent/lease payments, mortgage interest, utility payments...  paid during the 24 weeks after the loan date.  Additional permissible costs:  Covid-19 worker protection expenses, covid-19 facilities modifications, "essential to operation" supplies, software, cloud support, accounting fees.  Expenditures should include only American made products "to the extent feasible". 
    • Simplified forgiveness application for loans $150k or less.
    • Any related loan forgiveness will not be taxable to you (usually is taxable). 
    • EIDL advances no longer reduce available forgiveness.
    • Business expenses paid with forgiven PPP loans ARE tax deductible for federal.
    • Continuing rules with PPP#2...
      • Eligible payroll does not include compensation  above $100k in wages, payroll taxes and any sick or family leave as part of the recent Families First Coronavirus Response Act.
      • ​Recurring monthly costs forgiven had to be present before the loan date (so must be old recurring costs, not brand new costs). 
      • Forgivable amount may be reduced if business reduces its employee count during the 24 week period.
      • Forgivable amount may be reduced if compensation drops by more than 25% during the 24 week period.
      • ​Currently 1.0% interest (but can increase to 4%), 5 year term, up to $2 million
      • ​​Loan payments are deferred for 6 months to 1 year.
      • no collateral or personal guarantees required
      • ​Affiliations with similarly owned companies can be a factor.
      • ​requires that you were in business on or prior to 02/15/2020


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Small Business Emergency Loan
PPP#1 loans... Paycheck Protection Loan...  apply via your bank by 08/08/20
  • 04/21/20 update...  my current advice to small business clients is that collecting unemployment may be a better option than this program.  There are a lot of hoops to jump through with the application as well as applying for loan forgiveness.  The forgiveness is not guaranteed (the bank has final say).  So loans under $10k are probably not worth the effort in my opinion.  Collect unemployment instead.
  • Currently 1.0% interest (but can increase to 4%), 5 year term, up to $10 million
  • Can borrow up to 2 .5 months of payroll costs... based upon 12 months prior to loan date
  • Loan payments are deferred for 6 months to 1 year.
  • Has potential to be partially forgiven!!!
    • Forgiveable portion of the loan is 8-24 weeks of certain operating expenses (payroll costs, interest payments, rent/lease payments, utility payments)...  incurred after loan origination date.  
    • The costs forgiven had to be present before 02/15/20 (so must be old recurring costs, not brand new costs). 
    • Forgivable amount may be reduced if business reduces its employee count as compared to what it was in 2019.
    • Forgivable amount may be reduced if compensation drops by more than 25% compared to prior year.
    • Eligible payroll does not include compensation  above $100k in wages, payroll taxes and any sick or family leave as part of the recent Families First Coronavirus Response Act.
    • Any related loan forgiveness will not be taxable to you (usually is taxable). 
  • no collateral or personal guarantees required
  • requires 500 or less employees
  • Affiliations with similarly owned companies can be a factor.
  • Who can apply? 
    • Any business with 1-500 employees.
    • A sole proprietor (assumed also to include partner/LLC with self-employment income).
    • You must certify that the loan request is necessary due to current or anticipated economic conditions and uncertainty resulting from Covid-19.
  • What can the money be used for?  payroll costs, mortgage interest, rent, utilities 
  • requires that you were in business prior to 02/15/2020
  • click here for a great summary... US Chamber of Commerce summary
  • Apply with SBA lender 4/03/20 to 08/08/20
  • Updates to PPP #1:
    ​
    PPP borrowers can choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period.
     
    The payroll expenditure requirement drops to 60% from 75%.BUT IS NOW A CLIFF, meaning that borrowers must spend at least 60% on payroll or NONE of the loan will be forgiven.
     
    Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30.
     
    The legislation includes two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. Previous guidance already allowed borrowers to exclude from those calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic. The new bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.
     
    Borrowers now have five years to repay the loan instead of two. The interest rate remains at 1%.