This provision applies to PPP1 loans and all PPP loans going forward. Second-draw applications began on Wed., Jan. 13. "Paycheck Protection Program First Draw Loans. If you returned all or part of your first PPP loan, you can apply for an amount thats equal to the difference between the money you kept and the maximum funds available to you. Copyright 2023 Funding Circle Limited. Theres also one notable change to payroll costs, which is the addition of employer-provided group insurance benefits, including group life, disability, vision, or dental insurance. Small Business Administration (SBA) loans, NAICS code beginning in 72 may receive up to 3.5 times their average monthly payroll costs, Qualified businesses could receive 2.5 times their average monthly payroll costs up to $10 million. This included using no more than 40% for non-payroll costs. If your business was operating by February 15, 2020, but hasnt been operating for a full 12 months yet, you can figure out your average monthly payroll costs by examining payroll from the months you have been operating. Please enter valid email address to continue. How It Works, Pandemic Emergency Unemployment Compensation (PEUC) During Covid, Federal Pandemic Unemployment Compensation (FPUC): An Overview. The new law also carved out additional benefits for restaurants, hotels, and other businesses under the NAICS Code 72. After round two loans ended in August of 2020, the CAA authorized the third round of PPP loans. If youre a seasonal business, you can count your average monthly payroll costs from any 12-week period of your choosing between February 15, 2019 and February 15, 2020. In addition, the Economic Aid Act expanded the list of expenses from the original short list of rent, utilities, mortgages, and interest on existing debt, to include essential supplier costs, personal protection equipment, and operational expenses such as software, accounting, and cloud computing. But according to tracking by the Pandemic Response Accountability Committee, only 4.1 million loans had been forgiven as of June 30, totaling $394.6 billion. "FACT SHEET: Biden-Harris Administration Increases Lending to Small Businesses in Need, Announces Changes to PPP to Further Promote Equitable Access to Relief.". COVID-19 Resources. Guide to COVID-19 Personal Finance Assistance, How SBA Loans Can Help Your Small Business, How to Navigate the Latest Small Business Relief Plan and Get a PPP Loan, The End of the Employee Retention Credit: How Employers Should Proceed, How and Where to Get COVID-19 Financial Help, Applying for a COVID-19 Economic Injury Disaster Loan (EIDL) by the Dec. 31 Deadline. PPP loan borrowers are permitted to apply for forgiveness at any time up to the maturity date of their loan. "SBA Paycheck Protection Program (PPP) Loan Forgiveness: In Brief," Pages 1-2. Proper Treatment of Improperly Forgiven PPP Loans, H.R. On January 6, 2021, the Small Business Administration (SBA) issued newguidanceon which businesses are eligible and how to apply for thenew round of Paycheck Protection Program(PPP) funds authorized in the new Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act) signed into law on December 27, 2020. The second type was second-draw loans of up to $2 million for entities that had received PPP loans. There were two draws from the PPP loan program, and some businesses that were approved for the second draw are still waiting to receive funds. Round one and Round two PPP loans stipulated that the period during which a business had to use its loan proceeds (the covered period) was an eight-week period beginning on the date the business received its loan proceeds. These borrowers of less than $150,000, however, have to document the reduction in revenue upon applying for forgiveness. Lets have a look at a few. Unlike the first round of PPP, however, while the method of calculating the new loans is the same, the new loans are capped at $2 million. If not, quarterly financial or bank statements may suffice. Under the stimulus relief bill, parents who make under $75,000 a year and have a child under 6 years of age will receive $3,600 through the child tax credit. If you didnt receive a PPP loan last year, or if you did but still need additional funds to stay afloat, consider applying this round. If you applied for a PPP loan after the May 31 cutoff date or missed the boat completely, other programs are available to businesses hurt during the pandemic. These entrepreneurs are busy running their businesses and are challenged by an overly complicated forgiveness process. The Board's rule extension will allow those individuals to apply for PPP loans, consistent with SBA's rules and restrictions. "H.R.266 - Paycheck Protection Program and Health Care Enhancement Act. The amount of funds made available in the third round totaled $284 billion. The Paycheck Protection Program ("PPP") application portal . ", Small Business Administration. However, if you had a hard time getting funding or didnt receive much help throughout the process, it may be time to consider a different lender. The SBA says those loans will continue to be funded. Lantern by SoFi. More second draw loans. These loans are also capped at $2 million. Loans were 100% guaranteed by the government. That means about $68. This guidance outlined the following set-asides for these businesses: The guidance outlines that the SBA will only accept loan applications from community financial institutions for at least two days after the loan portal reopens, and that it will engage in community and public outreach along with a media campaign to promote the program and encourage these groups to apply. That was later expanded to 24 weeks. Here are a few key facts about the first round of PPP loans: Though the program helped countless small businesses stay afloat amid COVID-19 shutdowns and restrictions, the Paycheck Protection Program wasnt a cure-all for the small business economy. The claim that a fourth stimulus payment worth $2,000 per person will arrive by Memorial Day weekend is FALSE, based on our research. Small businesses may be able to apply for a loan as early as January 15, 2021. Sen. J.D. Based on these figures, it's safe to say the future for additional PPP loans doesn't look promising. Small businesses with 500 or fewer employees (300 or fewer for second-draw loans), Businesses categorized as "Accommodation or Food Services" such as restaurants and hotels with 500 or fewer employees per location (300 or fewer for second-draw loans), 501(c)(3) businesses or tax-exempt nonprofit organizations; tax-exempt 501(c)(19) veterans organizations; 31(b)(2)(C) tribal business concerns, Housing cooperatives; eligible section 501(c)(6) organizations, or eligible destination marketing organizations with 300 or fewer employees, News organizations that were majority-owned or controlled by a NAICS code 511110 or 5151 business or a nonprofit public broadcasting entity with a trade or business under NAICS 511110 or 5151 with 500 or fewer employees, Business must have been in operation on Feb. 15, 2020, They had received and used (or expected to use) all proceeds from the first-draw loan by the time they received (or expected to receive) the second-draw loan proceeds, They could demonstrate that they experienced a loss of at least 25% of, They spent all proceeds from their first-draw loan on eligible expenses, Ineligible under existing SBA regulations, Primarily engaged in lobbying or other political activities, Owned by an entity created in, or with significant operations in, the People's Republic of China or the Special Administrative Region of Hong Kong, Included a board member who was a resident of the People's Republic of China, A recipient of a shuttered venue operator grant under Section 24 of the Act, $15 billion for lending by community financial institutions. Neil Hare is an attorney and President of Global Vision Communications, where he specializes in small business policy, advocacy, and communications campaigns; follow him on Twitter @nehare and on LinkedIn. 815 N. 4th St, Ste C . Sole proprietors, independent contractors, and self-employed people. It also includes businesses that represent performers. Both first- and second-draw PPP loans were subject (but not limited) to the same general terms and conditions as original PPP loans under the CARES Act: While there were key differences between first- and second-draw PPP loans, the types of eligible entities were the same. For a First Draw PPP Loan, that certification means that the borrower has no more than 500 employees, is a small business concern as defined in section 3 of the Small Business Act (15 U.S.C. Get browser notifications for breaking news, live events, and exclusive reporting. Small Business Administration. Small Business Administration. "60,000 Paycheck Protection Program Loans Approved in First Week. Congress has approved three waves of stimulus payments during. Of that, $680,813,821,189 was asked to be forgiven. This requirement applied to both first- and second-draw PPP loans. New first- and second-draw loans followed a pattern similar to that followed with previous PPP loans. ", Small Business Administration. Your Paycheck Protection Program (PPP) loan must be used for payroll, mortgage interest, rent expenses, or utilities. Under the new legislation, the SBA is getting over $284 billion in funding for first and second-time PPP loan borrowers. 94 9.7K views 1 year ago UNITED STATES So if you're waiting for PPP loan round 4 and want to know when you'll get a chance to fill out new PPP application, then watch this quick update to. The program is expected to reopen sometime in early January and run through March 31, 2021 or until funds are exhausted. Also, it gives easy access to borrowers to apply for SBA loans online along with relaxed borrower requirements. In addition, while first-time borrowers can have 500 or fewer employees as in round one of PPP, second-time applicants can only have a maximum of 300 employees. After the PPP loan program ended, the SBA reopened its SVOG (Shuttered Venue Operators Grant) program, which has over $16 billion in grants available for shuttered venues. Shuttered venues include theaters, music venues, and other similar businesses. "SBA Paycheck Protection Program (PPP) Loan Forgiveness: In Brief," Page 5. You need to have proof you spent your funds correctly in case you get audited. We need to deliver forgiveness more efficiently so they can get back to enlivening our Main Streets, sustaining our neighborhoods and fueling our nation's economy.". Everything, Entrepreneurship Is Core To Civil Rights: A Conversation With National Urban League President And CEO Marc H. Morial, High Interest Rates At Banks Make Alternative Lenders More Attractive For Small Business Borrowers, The Complete 35-Step Guide for Entrepreneurs Starting a Business, 25 Frequently Asked Questions on Starting a Business, 50 Questions Angel Investors Will Ask Entrepreneurs, 17 Key Lessons for Entrepreneurs Starting A Business, Guidance on Accessing Capital for Minority, Underserved, Veteran, and Women-Owned Business Concerns. The Paycheck Protection Program ended May 31, 2021 after all funding was exhausted. We will make changes here as they become law. The first-draw application was five pages long, including instructions, and the second-draw application was six pages, including instructions. PPP loan recipients could use up to 40% of loan proceeds for non-payroll costs, although the list of authorized uses did limit non-payroll spending. of approximately $8.2 million under round two of the PPP. To date there have been no further allocations to the PPP. As of April 5, the Small Business Administration, which oversees the program, has approved nearly 4 million PPP loans worth about $224 billion, according to the agency. The Biden-Harris administration later increased funding, making it more accessible to others. At Funding Circle, were here for small businesses like yours, especially during this confusing, chaotic time. In a positive development, borrowers of loans of $150,000 or less can check the box, self-certifying they used funds according to regulations, making the application process much simpler. The Paycheck Protection Program was first passed by Congress in spring 2020 as part of the first round of coronavirus relief in response to the pandemic. The agency also issued forgiveness guidance and new forgiveness applications. We also reference original research from other reputable publishers where appropriate. 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