Good News! The SBA announced that the Paycheck Protection Program (PPP) re-opened this week for new borrowers as well as certain existing PPP borrowers. This new round of the PPP authorizes up to $284 billion toward job retention and certain other expenses. Here’s what we know…
Key PPP updates include:
- PPP Qualification: 25 percent drop in revenue in one quarter of 2020 compared to same quarter 2019. Fewer than 300 employees per location. In business prior to February 15, 2020.
- Businesses that received a PPP loan the first time can apply for a second loan under the new PPP, with certain restrictions.
- Similar to the first round, you can apply for 2.5 times average monthly payroll in 2019 unless you own a restaurant or bar, then you can apply for up to 3.5 times monthly payroll. PPP borrowers can set their PPP loan’s covered period to be any length between eight and 24 weeks.
- PPP loans will now cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures. (The program still requires a minimum of 60 percent toward payroll expenses.)
- The program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations.
- PPP eligible expenses are now tax deductible. This applies to prior and new PPP loans.
- Loan Forgiveness Reduction: If you also received an EIDL grant, your PPP loan forgiveness will no longer be reduced by the amount of the grant.
- Businesses in low-income communities that received an EIDL loan can get a grant equal to the difference of what they received and $10,000, and those businesses in low-income communities that did not get EIDL loans/Advance grants because funds had run out can now get $10,000.
Here are the things to do now to get ready for a PPP application!
- Determine your eligibility
- Get your financial books in order
- Call your lender
For more information, check out the U.S. Chamber of Commerce Guide to New Pandemic Relief Package, or SBA PPP, or if you would like to speak with a business adviser at COCC’s Small Business Development Center, contact us at 541-383-7290 or sbdc@cocc.edu or simply submit an advising request at oregonsbdc.org/coccregister.
