New 2021 PPP Loan Information
Below is a summary I received from my local Bank in regard to assistance that is available to you. In most cases you should be able to receive help from your local Bank in processing the paper work. There is a link below which will take you to the SBA Website. It also gives you the option of reading this in many different languages. Paul Bedrin, Partner
What you need to know
The Federal Government recently passed a new COVID-19 relief bill that provides fresh Paycheck Protection Program (PPP) funding to support businesses directly affected by the pandemic. Much like the first iteration of the PPP, aid will be in the form of forgivable loans for small businesses but there are some key changes this time around. It’s important you understand what these changes mean for you and your small business.
Please note, additional guidelines from the SBA are forthcoming and as such, we will keep our customers updated as further information is announced.
Who is eligible?
- Businesses, nonprofits, self-employed workers and independent contractors may be eligible for the next round of PPP funding.
- Previous PPP borrowers can apply for a second loan as long as they have 300 or fewer employees and can demonstrate that they experienced a 25% reduction in in gross receipts in 2020 relative to the comparable periods in 2019.
- First-time PPP borrowers will be subject to the same eligibility rules as the original rollout.
How much are small businesses eligible for?
- Loan amounts will be based on the applicant’s payroll as it was with the first round of funding.
- The maximum for second-draw loans is $2 million.
- Eligible second-time PPP borrowers may be able to borrow an amount equal to 2½ times their average monthly pay roll costs.
- Eligible small businesses in the accommodation and food services industries (NAICS code 72) could qualify for loans 3½ times their average monthly payroll.
What are the requirements for loan forgiveness?
- Similar to the original PPP loan program, the small business can use the loan proceeds over a period of 24 weeks and can use the funds for payroll, rent and mortgage expenses.
- Borrowers are required to spend at least 60% of the funds on payroll expense to receive full forgiveness.
- The other 40% of the funds may be used on eligible coast as defined by the SBA’s (Small Business Administration) guidelines. These costs can include certain mortgage expenses, rent and utilities.
- The new bill expands forgivable expenses to include personal protective equipment, supplier costs, operations expenditures and property damage costs due to public disturbances that occurred this past year.
- The new bill provides a simplified forgiveness process for PPP loans under $150,000. This includes a one-page certification attesting that owners complied with the program’s requirements.
When can you apply for a new PPP Loan?
Over the coming weeks, the SBA will issue final rules and guidance on the next round of PPP funding. We will continue to provide you with updates as more information becomes available.https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
Business Financial Relief
Our nation’s small businesses are facing an unprecedented economic disruption due to the Coronavirus (COVID-19) outbreak. On Friday, March 27, 2020, the President signed into law the CARES Act, which contains $376 billion in relief for American workers and small businesses.
Small Business/ Businesses with Under 500 Employees:
Economic Injury Disaster Loan Emergency Advance
This loan advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties.
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid. Click here to apply…
Businesses with under 500 employees should look into this option.
Paycheck Protection Program
An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.
Lenders may begin processing loan applications as soon as April 3, 2020. The Paycheck Protection Program will be available through June 30, 2020.
Visit your businesses banking website to apply for Paycheck Protection Program Loan.
SBA Express Bridge Loans
Enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly.
Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.
- Up to $25,000
- Fast turnaround
- Will be repaid in full or in part by proceeds from the EIDL loan
SBA Debt Relief
The SBA is providing a financial reprieve to small businesses during the COVID-19 pandemic.
As part of SBA’s debt relief efforts,
- The SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months.
- The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020.
Economic Impact Stimulus Payment
Who is eligible for the economic impact payment?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return.
I have a tax filing obligation but have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?
Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.
I need to file a tax return. How long are the economic impact payments available?
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
IRS People First Initiative
“The new IRS People First Initiative provides immediate relief to help people facing uncertainty over taxes,” Rettig added “We are temporarily adjusting our processes to help people and businesses during these uncertain times. We are facing this together, and we want to be part of the solution to improve the lives of all people in our country.” Click here to read more…
For a complete overview of IRS Coronavirus Initiatives visit: https://www.irs.gov/coronavirus