GET PPP READY

PPP 2.0 Applications are due by March 31, 2021.

• If you qualify for PPP 2.0, apply with your existing bank.
• If your bank is not participating, visit sbalenders.com for a list of lenders.
• Look for a participating bank based in the District of Columbia.

Important PPP 2.0 Documents

• PPP First Draw Loans Overview (English) / (Español)
• PPP Second Draw Loans Overview (English) / (Español)
• How to Calculate First Draw PPP Loan Amounts (English)
• How to Calculate Revenue Reduction and Second Draw PPP Loan Amounts (English)
• More Information Available on SBA Website (English) / (Español)

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.

1. Tax Return
   • The final 2019 business tax return is required.
   • If your business was not in operations in 2019, the draft or final 2020 business tax return is required.
   • You may opt to calculate the payroll costs from 2020 instead of 2019. In that case, supply both the final 2019 tax return and your draft or final 2020 tax return.

1. Payroll Documentation
   • Corporations and Businesses with Employees (all the following):
     • Form 940, Forms 941, or W-3
     • W-2 forms or payroll processor record
     • (Optional) State/local unemployment tax quarterly reports
     • (Optional) Group health insurance invoices and proof of payment
     • (Optional) Proof of retirement plan contributions
   • Self-Employed Individuals and Businesses without Employees (one of the following):
     • 2019 IRS Form 1099-MISC
     • 2019 Invoice
     • 2019 Bank statement
     • Book of record establishing you were self-employed in 2019.

1. Proof of Operations Around February 15, 2020 (one of the following):
   • Payroll processor record for the pay period that includes February 15, 2020.
   • Business bank statement for February 2020
   • Invoice on or after February 15, 2020
   • Book of record establishing you were in operations on February 15, 2020.

1. Certification of Beneficial Ownership (download here)
   • List all owners with 20% or more share of the business.

1. Business Formation Document (all that apply):
   • Articles of Incorporation/Organization
   • Bylaws
   • Partnership Agreement
   • Non-Profit Bylaws
   • 501(c)(3) or 501(c)(6) Evidence

1. Photo Identification (one of the following):
   • Driver license
   • Passport or Certificate of Naturalization
   • Lawful Permanent Resident Card (both sides)

1. SBA Application – First and Second Draw Applicants
   • SBA Form 2483 (English) / (Español)
   • SBA Form 2483-Second Draw (English) / (Español)

1. Proof of 25% Revenue Reduction – Second Draw Applicants Only (one of the following):
   • NOTE: Please refer to the answer to question 4 in the "How to Calculate Revenue Reduction..." document linked at the top of the webpage for details on what documentation is required.
     • Compare gross receipts from any quarter in 2020 to the same quarter in 2019.
     • Compare the annual 2020 gross receipts to the annual 2019 gross receipts.
     • (If not operating in 2019) Compare gross receipts from any quarter in 2020 to Q1 2020.

1. Proof First Draw PPP Loan Funds Used – Second Draw Applicants Only (one of the following):
   • Email confirmation from your lender that your forgiveness application has been submitted to SBA.
   • SBA Notice of Forgiveness Confirmation Letter

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: 

• Businesses with 10 or fewer employees located in a mid-low income area who never received a PPP Loan - $ 15 Billion
• Businesses with 10 or fewer employees located in a mid-low income area who did get a PPP Loan and now want to get a second draw (PPP 2.0) - $ 25 Billion
• Maximum Loan Amount is $ 250,000
• SBA may ask for verification of your identity before issuing the grant
• Lenders in under-served communities include small community banks, small credit unions, community development financial institutions (CDFIs), certified development companies (CDCs), minority depository institutions (MDIs), and SBA Microloan intermediaries (non profits)

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: 

• Operating Expenses: Business software or cloud computing service that facilitates business operations such as payroll, inventory tracking, accounting, sales, etc.
• Worker Protection Expenses: Operating or Capital expenses required to comply with COVID-19 government mandates including: Renovations, New Drive Thru, New Barriers, New Outdoor Space, Sneeze Guards, Deep Cleaning, COVID-19 Testing, Protective Gear, and other protective measures directly associated with protecting workers and / or customers.
• Supply Expenses: Expenses for core operational supplies such as materials to make products or restock depleted inventories pursuant to contracts / purchase orders in effect before the loan.
• Property Damage Costs: Business property damaged by looting, vandalism or public disturbances in 2020 that were not covered by insurance or other sources.

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