A second round of Paycheck Protection Program loans (PPP) will reopen on Monday, January 11, 2021. Initially, PPP loans will only be available through financial institutions that serve women- and minority-owned businesses. PPP loans will open to first-time borrowers through those institutions on Monday, and to second-time borrowers on Wednesday, January 13. PPP loans will be available through all institutions “shortly thereafter,” according to the Small Business Administration and United States Treasury. The closing date for applications for the second round of PPP loans will be March 31, 2021.
Expanded Forgiveness and Eligibility Available for PPP Loans
Effective with the passing of the COVID-19 relief bill, the second round of PPP loans features relaxed rules for forgiveness and eligibility, including:
- A choice of a covered period of any length between eight and 24 weeks. Businesses must spend at least 60% of their loan proceeds on payroll on during the covered period to qualify for full loan forgiveness. Previously, businesses had to choose between an eight- and a 24-week covered period.
- Additional expenses eligible for loan forgiveness, including costs for operations, suppliers, personal protective equipment, and property damage.
- Eligibility for organizations including 501(c)(6), direct marketing organizations, housing cooperatives, and more.
- Flexibility related to seasonal employees.
- Modification of first-draw loan amount for certain existing PPP loan borrowers.
- Eligibility for a second PPP loan for certain borrowers, if they have:
- 300 or fewer employees.
- Spent their entire PPP loan on eligible expenses, on or before the date that the second loan is disbursed.
- Experienced a 25% revenue reduction in any quarter of 2020 compared to the same quarter in 2019, substantiated by tax returns.
New PPP Loan Forms Available
The US Small Business Administration and Treasury released new PPP loan application forms including Form 2483 – Paycheck Protection Program Borrower Application Form and Form 2483-SD – PPP Second Draw Borrower Application Form. Form 2483 is updated from previous versions, and Form 2483-SD is a new form available for borrowers to apply for a second PPP loan.
For help applying for a PPP loan, obtaining forgiveness, or any related matters, please contact your trusted Chugh CPAs, LLP professional.