PPP 2.0 Applications are due by March 31, 2021.
Important PPP 2.0 Documents
What You'll Need
The following documents are required for all first draw PPP applicants and any second draw applicant that is applying through a different lender than the first PPP. Please see further below for requirements for the second draw PPP.
Loan Amount Information
Loan amounts are the same as the first round - 2.5 times your monthly average payroll in 2019 or 2020. If self-employed, Profits per Line 31 on Schedule C divided by 12 x 2.5 for either 2019 or 2020. Choose the higher of the two calculations. NOTE: Use same lender and 2019 for Second Draw – Reduces documentation requirement.
PPP 2.0 | More Targeted Loans
First-Come, First Serve lending practices under both the PPP and EIDL Loan Programs prevented businesses in under-served communities from obtaining these loans. To correct this issue, PPP 2.0 has two set-asides:
Slightly Expanded Payroll Cost
Same as before: Gross Pay for U.S. Residents up to $ 100,000 for the year + Employer Share of Insurance which includes Health, Dental, Vision, Disability and Life+ Employer Share of Retirement + State Unemployment.
NAICS Code 72
If your business has a NAICS Code that begins with 72, PPP Loan is 3.5 and not 2.5 in calculating the loan amount. Easy Calc – Take PPP 1.0 Loan Amount / 2.5 x 3.5 = PPP 2.0 Loan Amount
Your 2019 business tax return should reflect the NAICS Code that you should follow. You can find your NAICS - or business activity code number - on your 1120-S form.
Non Payroll Expense Expanded for PPP 2.0
Must use 60 percent or more on Payroll to obtain 100 percent loan forgiveness. The 40 percent non-payroll expenses (Rent, Utilities and Mortgage Interest) has been expanded to include the following:
Improvements for PPP Forgiveness
For loans of $ 150,000 or less, new one-page form can be submitted. Still need to compile and maintain documentation and certify that you used the loan in accordance with the requirements of the PPP program. Documentation includes 25% quarterly drop in Gross Revenues. EIDL Advance will not be deducted from your Forgiveness Amount
Flexible End Date
Loan Coverage Period can end on any date after the loan origination date between 8 to 24 weeks. PPP 1.0 Loan Coverage Period can extend through March 31, 2021.
SOURCES: Small Business Administration and Latino Economic Development Center
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