PPP Loans Available Again For Small Businesses

The final days of 2020 saw a rally in the U.S. Congress for legislation providing additional stimulus to businesses hurt by the continued Corona Virus Pandemic. This includes PPP loans to contractors among other small business sectors.

Many contractors took advantage of the PPP loan option last spring. Some that did not may now be in need of help with the resurgence of COVID-19 with the colder winter weather and holidays. The new legislation by Congress is similar but does include a few changes. The FTI team sorted through the legislation and identified important aspects for small businesses, which include many of our customers in the insulation industry. Business that did not previously apply may do so if they meet the general requirements. Below are the eligibility requirements for businesses interested in applying for the next round of PPP loan funds.

If I already got one loan, can I get another one? is the main question businesses that did previously get a loan are asking. The answer is YES. These are called “second draw” loans, and as long as a business meets the qualifications below, they are eligible and may apply for a PPP loan:

• Second draw applicants must have used the entire amount from their first PPP loan.
• Second draw applicant loans are capped at $2 million, new applicants still have a $10 million cap.
• Deadline to apply is March 31, 2021.
• Will this impact my existing forgiveness application? If you received more than $150,000, it probably won't. If you received less, the process should be much easier.
• Can I apply for a second loan, if I already received forgiveness from the first loan? Yes, this is allowed under the new program.

These requirements apply to All Applicants under the new program:

• Applicants must have no more than 300 employees (instead of up to 500 in the first program)
• Funds must be used within 24 weeks
• Funds must be used with at least 60 percent going toward payroll
• Remaining funds must be used toward eligible expenses like rent and utilities, cloud computing, remote-work software, equipment for government-mandated sanitation and social-distancing.
• Forgiveness for this round is simplified for loans under $150,000 (versus $50,000 last round). Requires a description of how much loan money was spent on payroll, and how many employees the recipient was able to retain as a result. Affected businesses will not need to submit documentation supporting their claims, but should keep it on hand in case of an audit down the line.
• Applicants must demonstrate at least a 25 percent drop in quarterly revenues versus the same quarter in 2019.
• Loans are calculated by multiplying 2.5 times Payroll for one of the two following time periods:
  • Borrower’s average monthly payroll in a one-year period prior to the application date
  • Borrower’s average monthly payroll calendar year during 2019 calendar year, by 2.5 times
• Deadline to apply is March 31, 2021.

As with the first round, funds are limited and available to qualifying businesses on a first come-first served basis. Business owners interest should contact their bank(s) soon to inquire about availability of funds and participation as lenders in the program.

Good luck to everyone as we all continue to navigate through this ongoing world-wide crisis in 2021.