![]() Most banks will be able to start submitting PPP applications to the SBA beginning Tuesday, January 19. Improved Coordination Between PPP and ERTC Our team can assist with helping determine eligibility and, if appropriate, applying for a PPP loan using an existing banking relationship or by providing an alternative lender. The following is a deep dive into the rules and provisions entities need to know before applying for more PPP funds.īoyer & Ritter is prepared to help businesses and nonprofits seeking a first or second loan under the new Payroll Protection Program. Many provisions of this round of PPP are the same as the CARES Act, but the Economic Aid Act expands eligibility to additional entities and permits entities that meet certain eligibility requirements to apply for a second PPP loan. The Economic Aid Act contains several provisions to support entities impacted by the Coronavirus pandemic, including $284.5 billion appropriated for another round of PPP funding. If you are not yet a client but are interested in information regarding our services, submit a request through our contact form and someone from our team will reach out to you shortly.The Paycheck Protection Program (PPP) was resurrected with the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (the Economic Aid Act) which was included in the Consolidated Appropriations Act, 2021, signed into law on December 27, 2020. Our attorneys’ expertise in business law, corporate governance, and tax law will help ensure you can obtain funds for which you are eligible while remaining within the strictures of the law. If you have questions about the implications of recent developments or the suitability of a PPP2 loan for your objectives, MendenFreiman can assist. This e-alert is intended only as an informational overview. We encourage all potential borrowers (particularly those who borrowed over $2 million during the first round of PPP or who will be in the top decile of borrowers during round two) to undertake a careful analysis of their business activities and liquidity prior to applying and to document the necessity of the loan and authorize the application therefor through proper corporate governance procedures. Good Faith: Borrower can certify in good faith that the current economic uncertainty makes the PPP2 loan request necessary to support ongoing business activities.Use of First PPP Loan: Borrower has used the full amount of the first-round PPP loan for eligible expenses.Operations: Borrower must have been in operation on February 15, 2020, and must not have permanently closed. ![]() Decline in Gross Receipts: Borrower must have experienced a 25 percent or greater decline in gross receipts during any fiscal quarter of 2020, compared to the same period in 2019 (be prepared to demonstrate this through financial statements or tax documents).Size: Borrower must be an independent contractor or sole proprietor (self-employed) or have no more than 300 employees.At least 60 percent of the loan amount should be dedicated to payroll costs: compensation, health (which now expressly includes vision and dental insurance) and retirement benefits, group life and disability insurance payments (new for PPP2), and state and local payroll taxes, during a covered period between 8 and 24 weeks, as the borrower may elect.Īlthough the government has provided for limited exceptions, the general rules for eligibility for PPP2 applicable to most borrowers include the following: ![]() Nevertheless, PPP2 remains primarily an employee-protection endeavor. In addition to retaining workers, maintaining payroll, and making payments for mortgage interest, rent, and utilities, PPP2 funds may also be used to pay covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures. The government expanded the categories of expenditures eligible for forgiveness for PPP2. Hotels and restaurants may use a multiplier of 3.5 times their average monthly payroll. The maximum loan amount for the second round of PPP ( PPP2) is calculated based on 2.5 times your average monthly payroll costs in the one-year period prior to the loan or during calendar year 2019. Nearly all community and institutional lenders have now opened their loan application process, and new PPP loans will be available through March 31, 2021. ![]() In late December 2020, Congress authorized a second round of Paycheck Protection Program ( PPP) loans, with funding available to qualified first-time borrowers and borrowers who received a loan during the PPP first round.
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