Links to the government websites
Alan Gassman and his team summarized the 116 pages that the SBA wrote to support the $900 Billion stimulus package. Here is their 1/7/21 Forbes.com article that covers many more details than I have listed.
Despite the government rules, we are seeing that the banks all have slightly different requirements. So just be methodical.
Check out my post on PPP Forgiveness here
Deadline to apply is March 31, 2021
If you received a PPP loan in the first round, you qualify for a second PPP loan if any quarter in 2020 had a decrease of 25% revenue compared to 2019. Be careful: with all of these programs, the devil is in the details. For the PPP 2.0 program, you must calculate the revenue the same way you calculate the revenue on Line 1.c. on your tax return. So if you file your tax return on the cash basis, this needs to be a cash basis revenue. Also, Line 1.c. does not include random income like sale of equipment and interest income.
Once you determine that you qualify, to calculate the amount of the loan you may choose either your 2019 labor or 2020 labor expense, divide this by 12, then multiply by 2.5. This is the same formula as the first round, however, you may include a few more expenses. Please refer to the SBA guidelines for the exact inclusions.
If you submit your loan application to the same bank as the first round, and you apply for the same loan amount, you can use the same documents that you submitted the first time. We have not heard from any banks yet whether you have to actually upload all of the documents again. Fingers crossed.
My recommendation is that unless you will get a significant increase in your loan amount, stick with your original loan and keep things simple. You are likely to qualify for a significant Employee Tax Retention Credit, so save some brain cells for that.
You don’t have to have applied for Forgiveness, but you have to have used all of your loan funds. I don’t know anyone who didn’t spend all of those funds, so this should be a moot point.
PPP First Round
If the rules changed, you can now apply for a PPP First Round loan. If the rules changed such that your loan would have been higher with the new rules, you may submit an amended application.
Farmers and Schedule F filers may now based on their GROSS income (yes, that is GROSS, not NET). Many farmers were not able to apply during the first round because they did not have payroll and used a vineyard management company.
Partners of LLC may now use their Net Profit based on the K1 as the owner “payroll”.
Both of these are limited to 100k “payroll”.