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Expert Counsel. Exceptional Solutions.

+1 (916) 822-8700

COVID-19 News
Analysis of the latest coronavirus pandemic updates

The Renewed Paycheck Protection Program (aka PPP2)

Probably the most important fact is that PPP funding is available to businesses that previously received a PPP loan. Business are eligible for a second PPP loan of up to $2 million, provided they have 300 or fewer employees, have used or will use the full amount of their first PPP loan, and can show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019. 

  • For First-Time Borrowers,
    • Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans.
    • Sole proprietors, independent contractors, and eligible self-employed individuals.
    • Not-for-profits, including churches.
    • Accommodation and food services operations (those with North American Industry Classification System (NAICS) codes starting with 72) with fewer than 300 employees per physical location.
  • Note – the legislation also allows borrowers that returned all or part of a previous PPP loan to reapply for the maximum amount available to them.
  • Loan Forgiveness. As with PPP1, the costs eligible for loan forgiveness in PPP2 include payroll, rent, covered mortgage interest, and utilities. There is also a simplified forgiveness application process for loans of $150,000 or less. PPP2 also makes the following potentially forgivable:
    • Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines.
    • Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations.
    • Covered operating costs such as software and cloud computing services and accounting needs.
  • To be eligible for full loan forgiveness, PPP borrowers will have to spend no less than 60% of the funds on payroll over a covered period of either eight or 24 weeks — the same parameters PPP1 had when it stopped accepting applications in August.

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See https://www.congress.gov/116/bills/hr133/BILLS-116hr133enr.pdfhttps://home.treasury.gov/system/files/136/PPP-IFR-Paycheck-Protection-Program-as-Amended-by-Economic-Aid-Act.pdfhttps://home.treasury.gov/system/files/136/PPP-IFR-Second-Draw-Loans.pdf, or the SBA  for more details or contact The Burton Law Firm.