Paycheck Protection Program (PPP) round 2 online application portal is expected to open on Tuesday, January 19, 2021 by most lenders.

Top 5 tips to help streamline the application process:

1.) Where to Apply: Most banks are accepting the PPP round 2 applications. Applying through the same bank that you used for PPP round 1 may streamline the process, but you are not required to use any particular bank. You can also choose to use the financials technology company e. g. kabbage.com, bluevine.com, intuit.com, etc. as well

2.) Who is Eligible for PPP round 2: Applicants must have been in operation on Feb. 15, 2020 in order to qualify. Self-employed business owners (including independent contractors) are also eligible for loans as long as they have shown a profit on their 2019 tax return. Here are the other criteria’s:

a.) Second-loan applicants must have 300 or fewer workers.
b.) A 25 percent drop in gross receipts between comparable quarters in 2019 and 2020.
c.) Applicants must also have used all of the money from the first PPP loan in allowable ways.

3.) How much can I get: Loans for PPP round 2 are capped at $2 million. Food services and lodging businesses, such as restaurants and hotels, can get loans of 3.5 times their average monthly payroll and rest everyone who qualifies gets 2.5 times their average monthly payroll like last time.

4.) What Documentations are needed: The documentation table below will assist with gathering the information needed to apply:

FOR BUSINESS WITH EMPLOYEES

• 2019 and/or 2020 IRS 940, 941 or 944 payroll tax reports.
• Payroll statement or similar documentation to demonstrate operations on 02/15/20.
• Summary of payroll expenses for Individual Employees with cash compensation over $100,000.
• Bank Statements.
• General Ledger Reports or statements to assist with Health.

FOR SOLE PROPRIETORSHIPS AND INDEPENDENT CONTRACTORS

• Form 1040 Schedule C or F for 2019 and/or 2020 (Self-employed individuals with no employees must submit Form 1099-MISC in addition to 1040 Schedule C or F).
• Documentation demonstrating 25% reduction in gross receipts for loans greater than $150,000.
• Payroll statement or similar documentation to demonstrate operations on 02/15/20.
• Bank Statements.
• General Ledger Reports or statements to assist with Health Care and Retirement benefits.

5.)    How About PPP-1 Loan Forgiveness:
PPP loan forgiveness guidelines are still changing. We are expecting additional changes in the next few weeks (especially with the new govt). Considering the CAA Relief Act passed by Congress on Dec 21st we are expecting SBA to further simply the loan forgiveness process. The SBA has 24 days after the enactment of the CAA Relief Act to create a one-page loan forgiveness certification form for loans of $150K or less that require the eligible borrower to:

• a.) Provide a description of the number of employees the Borrower was able to retain because of the PPP loan
• b.) Provide an estimated amount of loan spent by the Borrower on payroll costs
• c.) Provide the amount of the total PPP loan
• d.) Retain employment records for 4 years following submission
• e.) Retain other records for a 3-year period

Currently, we are advising all the clients to file the PPP (Round 1) loan forgiveness applications only after Feb 12th.