Buried deep within the $900 Billion COVID Stimulus Bill of pork barrel spending is another round of Paycheck Protection Program (PPP) Loans. And while many are hailing this third round as possessing all the hallmarks necessary to keep glutinous corporate interests at bay, I am not so convinced. That article, though, is for another day. What we will discuss today are the brass tacks you need to know in order to get refunded. That’s right, I said refunded as in a second round of PPP Loans!
The most significant development in the legislation for small businesses is a second round of PPP loans. The new legislation allocates around $284 billion and refers to the new loans as second draw loans. The loan limit is $2 million, and the amount a small business will qualify for is determined by taking their average monthly payroll in 2019 and multiplying it by 2.5. In other words, the second round of PPP loans is meant to fund 2.5 months of payroll expenses. The bill has a special calculation for restaurants and food businesses and provides those businesses a larger loan amount of 3.5 months of average monthly payroll. So, for example, if you had an average monthly payroll in 2019 of $100,000, then your small business would qualify for $250,000. If you were a restaurant or other qualifying food business, then you would qualify for $350,000.
To qualify for a second draw PPP loan, a small business must have 300 employees or less, down from the original 500 employee maximum in the first round. And a small business must have already used or plan to use their original PPP funding. To qualify for a second draw loan, a small business must certify that they have had a loss of revenue of 25% or greater. This criterion is drastically different from the original qualification rules for PPP, which simply required the small business to state that economic uncertainty made the PPP loan necessary. Under the 25% loss-of-revenue test, the small business will compare their 2020 quarterly revenue (aka, gross receipts) against their 1st, 2nd and 3rd quarters of revenue in 2019. In order to qualify for a second draw PPP loan, a borrower must be able to show a loss in revenue of 25% or more from at least one quarter of 2020 as compared to that same quarter in 2019.
Foreclosurepedia successfully secured over Two Million Dollars in PPP Loans as well as SBA EIDL funding. As this process will move quickly, now is the time to reach out for a Consultation and see if Retaining Foreclosurepedia is the right move to ensure that you are funded next month.
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