The Second Round of PPP Funding Has Favorable Changes for Small Businesses
If you’re a small business looking for financing relief to survive the storm caused by the pandemic, then pay attention. The Consolidated Appropriations Act was signed into law on December 27, 2020, and includes many forms of stimulus to support organizations and individuals impacted by COVID-19. The program’s reopening comes as the federal government extends efforts to preserve jobs and help businesses weather the coronavirus pandemic.
One of the most significant changes with the new PPP is that Congress made funding available to businesses that had previously received a PPP loan. Borrowers are eligible for a second-draw PPP loan of up to $2 million, even if an application for the forgiveness of an original PPP loan has not been filed.
The new legislation allows new borrowers with 500 or fewer employees to receive a loan. Additionally, a second draw PPP loans are available for up to $2 million to organizations with 300 or fewer employees.
The Act expands the types of organizations that are eligible for PPP loans. Organizations that now qualify include 501(c)(6) organizations, veterans’ organizations, farmers, ranchers, and media organizations such as newspapers, television, and radio stations previously ineligible.
Second PPP Loan Eligibility
The new legislation permits borrowers that previously received and spent a PPP loan to apply for a “second draw” PPP loan. These second loans are subject to new eligibility requirements, including the following:
- 300 or fewer employees (rather than 500).
- Used or will use the full amount of the first PPP loan on or before the second PPP loan’s distribution date.
- Experienced a revenue reduction of 25% or more in all or part of 2020 compared to all or part of 2019. This is determined by comparing gross receipts in any 2020 quarter with an applicable quarter in 2019.
Where to Apply for New PPP Loan
Begin your PPP loan application by contacting us at Randazzo Eschenburg & Associates. Our skillful staff will test your eligibility and match you with the appropriate loan amount. Our team can assist throughout the application process to ensure your loan experience is as seamless as possible. Contact your REA team member today to find out more.
Have More Questions?
The Consolidated Appropriations Act contains various provisions that can provide significant funding to businesses. Of course, financial advice is one of our services’ cornerstones, and we are always available to help further explain in more specific detail. If you have any questions, please feel free to contact us. We hope you learned something today. If you have any feedback or suggestions, we would love to hear them.