SBA PPP 2nd Round Loan Update
Cornerstone Financial Group prides itself on providing information relevant to your journey within our Questpoint process. Herein you will find the new guidelines for this second wave of PPP loans for small businesses. We are your local small business for all your financial planning needs and look forward in giving you information to help your small business succeed through these challenging times. If you would like clarification on any of the information presented herein, or would like to discuss this information further will us, please contact us today! Please feel free to share this with family and friends!
Since last summer, the SBA has signed loans for small business relief amounting to over $949 billion dollars. As of January 12th 2021, there will be an opportunity available for further aid relief for small businesses. There are currently $284 billion dollars appropriated for this second wave of business relief. Separated by first and second draws.
Here is what you need to know:
*Your business is eligible to apply as of January 11th 2021, and you must have fewer than 300 employees
*Here is the link (click here) with information to determine whether your business is eligible and also to apply
*This second round program is open until March 31st 2021
*Your eligibility is based on your operations. You will need to show proof of a downturn in the form of payroll statements and/or financial statements, that your business has had a 25% reduction in gross receipts from comparable quarters in the prior year.
*The maximum loan amount to be received this time around is $2 million dollars
*Loan proceeds received may now be used for not only payroll costs, there is now an expanded list of non-payroll costs allowable to be paid for with loan proceeds: utilities (electric, gas, water, transportation, phone and internet), software, sales and billing programs, records control, property damage from looting, purchase orders and contracts for perishable goods, expenditures for worker safety-such as, sanitation and social distancing expenses, air filtration, maintenance of pathways and spaces, development thereof to comply with FDA guidelines for small business. **new to this round of lending-you can choose to use 100% of your PPP loan on payroll costs if you choose.
*Forgiveness timeframe is a business chosen 8 or 24 week period in which to utilize the loan proceeds
*If your loan proceeds amount to less than $150k, there is a simplified loan forgiveness application for you to file with
*Any remaining balance left to be re-paid will be done so at 1% interest over 2-5 years
*Any business with an employee receiving more than $100k in compensation will not be eligible for relief
*You may defer loan re-payment for a period of up to 10 months
*Records such as bank statements and payroll records will need to be kept on file for forgiveness applications
*You do not have to have applied for forgiveness for your 1st PPP loan, to be eligible to apply for the 2nd round of PPP loans
Other options besides PPP loan available for your business:
If you are interested in obtaining grants, outside of a relief loan for your business, there are some available.
*EIDL grants are available to small businesses in the amount of $20 billion dollars,( click here) for more details and how to apply
*Your local Chamber of Commerce may also have local programs available for you to apply for local small business grants
*Employee Retention Tax Credit is available (click here) for more details and to see how you qualify. Please consult your tax professional for how this will apply to your business.
Other useful resources to aid your small business during this challenging time:
*OSHA is an invaluable resource for changing guidelines and requirements in the workplace, (click here) for more details
*SBA website will give you more details about changes/updates and guidance, (click here) for more details
Craig J. Watkins is an investment advisor representative of, and advisory services are offered through, USA Financial Securities Corp. Member FIRA/SIPC. A Registered Investment Advisor located at 6020 E. Fulton St., Ada, MI 49301. Cornerstone Financial Group is not affiliated with USA Financial Securities, CA License #0591010