The Paycheck Protection Program (PPP) got a $284 billion injection after Congress passed another stimulus package – the Economic Aid Act. Final details were released by the SBA Wednesday and lawmakers made notable changes to ensure the funding goes to small businesses. Here’s what small businesses need to know:
- The SBA will restart PPP on Monday, 1/11/21.
- Lenders targeting underserved communities will have exclusive access to offer loans to new borrowers Monday and Tuesday. Only applications from community financial institutions will be accepted.
- Lenders will then be able to offer second loans to existing borrowers starting Wednesday, 1/13/21.
- Applications for all business owners close on 3/31/21.
- Businesses will calculate their maximum loan amount using payroll costs for a one-year period, using a date of their choosing that can be in either 2019 or 2020.
- The maximum loan amount has been substantially reduced from $10 million to $2 million.
- You can receive a second PPP loan if you have fewer than 300 employees and lost 25% of your gross receipts over one quarter in 2020 compared to the same quarter in 2019.
- If you are taking out a loan under $150,000, you do not need to provide documentation of this loss until you apply for forgiveness.
- Sole proprietors, the self-employed, and independent contractors are eligible.
- The loans can still be forgiven but a firm must spend at least 60% of the funds on payroll.
- As before, there is no collateral or personal guarantees required for these loans.
