Second Round of PPP Loans
January 11, 2021
Second Round of PPP Loans
There is a new round of PPP loans becoming available and the applications go live on Monday, January 11, 2021. Many banks, however, will need additional time to get these applications on their web pages ready for applicants to start using them, so you may need to give it a few days for this to happen.
Additionally, some of the smaller banks may pressure you to file for forgiveness for your First PPP loan. You DO NOT need to file for forgiveness in order to start an application for the Second PPP loan. DO NOT let them pressure you to do that. If they do, find another bank to work with. We continue to advise you to hold off on filing for forgiveness until later this year. The due date for the First PPP loan is Ten Months AFTER the 24 weeks have expired. That puts the forgiveness date for most people until October.
FACTS for filing for PPP round TWO:
- You must have been in business on 2-15-20
- You must still be in business currently
- You must be able to show a drop in COLLECTIONS (not production) for any quarter of 2020 when compared to the same quarter in 2019.
- You will be required to certify that your business has used or will use the funds on qualified expenses from the 1st PPP loan – this does not mean that you have filed for forgiveness though. You probably should have already spent your 1st PPP funds on appropriate, qualified expenses
- If you own several practices/businesses – they must all be added together to do the comparison of the 25%. (They want to be sure that you don’t stack the deck with one practice/business over another one to work to your advantage unfairly)
- If a portion of the practice was sold or acquired, you may need to include some different calculations for that second PPP loan.
- You use the same payroll numbers for 2019 compared to 2020 that you did when you filed for the first PPP loan
- If you are using the same lender for the second PPP loan that you did for the first PPP loan, you may not have to resubmit the information.
- You still must complete an application for this second PPP loan.
- Loans that are greater than $150,000 – must provide documentation supporting the 25% drop in revenue
- Loans that are less than $150,000 – may provide documentation on the revenue drop when you apply for forgiveness rather than upfront when you apply for the second PPP loan
- For using the second PPP loan, focus on using payroll to qualify even though some other expenses may still be used but this information will be explained at a later point.
- Same calculation needed which is 2.5 months of payroll or about 11 weeks of payroll to use the funds to pay for payroll over a 24-week period of time
Be aware that the original qualifications for all of these loans is that you have a current economic uncertainty that makes this loan request necessary to support the ongoing operations of your practice/business. That is the whole purpose of making these funds available and you should be able to attest that this is true for your situation.
For assistance with organizing your necessary documentation, please contact your Monthly/Quarterly preparer. If you have any issues with working with your bank, just let us know because we are aware of other banking opportunities.
We are here if you have any questions.
Your Gray Pilgrim Team