Have already used or will use the full amount of their first PPP loan. "SBA Paycheck Protection Program (PPP) Loan Forgiveness: In Brief," Pages 1-2. If you returned all or part of your first PPP loan, you can apply for an amount thats equal to the difference between the money you kept and the maximum funds available to you. The same legislation that authorized the third round of direct payments in March . The seventh batch of direct stimulus payments worth over $4.3 billion included an additional 2 million payments . He was just two strokes back heading into the final round last year. In the meantime, the Economic Aid Act and new regulations improve PPP and expand it to those businesses that need it most. Funding Circle is not accepting requests for recalculations of first draw loans made before August 8, 2020. Paycheck Protection Program (PPP) loans outlined in Round 3 are guaranteed by the government, require no collateral or personal guarantees, and have an interest rate of 1% per year. The Paycheck Protection Program ("PPP") application portal . In a positive development, borrowers of loans of $150,000 or less can check the box, self-certifying they used funds according to regulations, making the application process much simpler. On Dec. 27, 2020, the Consolidated Appropriations Act, 2021 became law, which included new funding for the Paycheck Protection Program (PPP), which had expired on Aug. 8, 2020. 43% don't think their business will return to normal until either the fourth quarter or 2022. "H.R.1799 - PPP Extension Act of 2021: Summary. The program is expected to reopen sometime in early January and run through March 31, 2021 or until funds are exhausted. Offers may be subject to change without notice. Still, other programs are available to help your business recoup revenue lost during the COVID-19 pandemic. During round 1 of the paycheck protection program, Arden Group, LLC requested a PPP loan for $234,800.00. How It Works, Pandemic Emergency Unemployment Compensation (PEUC) During Covid, Federal Pandemic Unemployment Compensation (FPUC): An Overview. There were two draws from the PPP loan program, and some businesses that were approved for the second draw are still waiting to receive funds. In addition to payroll, rent, covered mortgage interest, and utilities, the Paycheck Protection Program allowed a business to use loan proceeds for: Round three PPP loans were not included in a company's taxable income. The American Rescue Plan, which was passed in March, added another $7.25 billion to the program. Is There A Fourth Round Of Ppp Loans. The SBA (Small Business Administration) isnt planning another round of PPP (Paycheck Protection Program) loans. The only exception is if your business has a NAICS code beginning in 72. The Consolidated Appropriations Act of 2021 (CAA) was signed into law on Dec. 27, 2020 and included new funding for the Paycheck Protection Program (PPP), which expired on Aug. 8, 2020. There are plenty of predatory lenders out there looking to take advantage of you, which is the last thing you need while seeking financial assistance. No. The starting date for a 14-day period, ordered by the Biden administration, during which only businesses with fewer than 20 employees could apply for a PPP loan. Businesses can receive up to 24 months of relief and a maximum loan of $500,000. The PPP Extension Act of 2021 is a new piece of legislation passed by Congress and signed into law by President Biden that extended the deadline for PPP loan applications from March 31, 2021, to May 31, 2021. They were approved on 4/28/2020 by the SBA for an amount of $234,800.00. It is important to note that the main activity of a business must be live entertainment, so a restaurant that provides a nightly singer, for example, would not be eligible. You can demonstrate a 25% reduction in gross receipts from any of the four quarters of 2020 compared to the same quarter in 2019. The following costs do not count as payroll: To qualify for full loan forgiveness, you need to spend no less than 60% of your total loan amount on payroll costs. People may receive compensation for some links to products and services on this website. Loans were 100% guaranteed by the government. If you werent in business during Q1, Q2, or Q3 of 2019, but were in business during Q4, you can compare any quarter in 2020 with Q4 of 2019 to determine where your gross receipts dropped by at least 25%. That means having suffered at least . Further, with the new Biden Administration being sworn in January 20, 2021, and a Democratically controlled Senate and House, new regulations and relief packages are on the horizon. Congressional Research Service. "The SBA's new streamlined application portal will simplify forgiveness for millions of our smallest businesses including many sole proprietors who used funds from our Paycheck Protection Program loans to survive the pandemic," administrator Isabel Guzman said in a statement. Lantern by SoFi. They do not purport to reflect the views or opinions of Funding Circle. ", Small Business Administration. Congressional Research Service. As noted above, applications for Round three first-draw PPP loans from approved community financial institutions started Mon., Jan. 11, 2021. The most recent round of Paycheck loans launched in early January with $284 billion in funding. On Tuesday, May 4th, the Small Business Administration ("SBA") informed trade associations, that PPP funding has been exhausted. The new PPP loans are largely subject to the same terms and conditions of the first round, including the following: Borrowers applying for a second round of PPP must also have used all of the first tranche of funds prior to or by the date of receiving new funds. Youre eligible for partial and full loan forgiveness with a second PPP loan provided you meet certain qualifications. The formula used to calculate PPP loans was revised to provide more funding for sole proprietors, independent contractors, and self-employed individuals. Under the new legislation, the SBA is getting over $284 billion in funding for first and second-time PPP loan borrowers. She is an adjunct professor at Connecticut State Colleges & Universities, Maryville University, and Indiana Wesleyan University. Opinions expressed by Forbes Contributors are their own. His expertise includes government programs and policy, retirement planning, insurance, family finance, home ownership and loans. The new $900 billion coronavirus relief bill includes $284 billion in PPP funds, along with provisions to help minority-owned businesses get loans . PPP loan recipients could use up to 40% of loan proceeds for non-payroll costs, although the list of authorized uses did limit non-payroll spending. Small Business Administration. Of that, $680,813,821,189 was asked to be forgiven. Here are the new areas you can allocate PPP loan funds to: Under PPP2, youre eligible for full loan forgiveness as long as you spend at least 60% of your loan amount on payroll costs. Internal Revenue Service. What Is the Employer Payroll Tax Deferral Provision? This content is for educational and information purposes only, and should not be taken as financial, tax, legal or HR advice. All approved PPP lenders could begin lending on Tues., Jan. 19, 2021. Also, it gives easy access to borrowers to apply for SBA loans online along with relaxed borrower requirements. What Was Third-Round Paycheck Protection Program (PPP) Funding? It is not intended as a substitute for professional advice. These new groups include 501c(6) organizations like chambers of commerce, nonprofits and religious entities, and local news organizations. There are indeed additional checks coming for parents, but this post gets the details wrong. Funds can also be used to pay interest on mortgages, rent, and utilities. If a loan was forgiven, expenses paid with the proceeds of the loan were tax-deductible. 117-6, did not include any additional funding for the current round of the PPP, which Congress provided with more than $290 billion to make forgivable loans to small businesses and not-for-profits suffering economic loss related to the COVID-19 pandemic. See the guide The SBA also outlines the businesses that were not eligible to apply for the new round of PPP, including the following: Writ large, the new PPP round has the same requirements for having the loan forgiven and turned into a grant. The direct portal, which will open for applications starting August 4, will be available for businesses that had PPP loans of $150,000 or less. A small business would have to be eligible and qualify for both first-draw and second-draw PPP loans, with second PPP loan requirements being more restrictive. These borrowers of less than $150,000, however, have to document the reduction in revenue upon applying for forgiveness. Doretha Clemons, Ph.D., MBA, PMP, has been a corporate IT executive and professor for 34 years. This week, the Small Business Administration sent out an update on how the latest Paycheck Protection Program is going. 133: Consolidated Appropriations Act, 2021 into law on Dec. 27, 2020. The interest rate for all loans was 1% and maturity was five years. COVID-19 Resources. See more of Neils articles and full bio on AllBusiness.com. You have already used or will use the full amount of your first PPP loan before your second PPP loans funds are disbursed. We do believe that that program is done, other than the forgiveness, which we can talk about it in a minute. July 28, 2021 / 7:51 PM As small businesses continue to weather the pandemic, another relief package containing $285 billion in Small Business Administration (SBA) Paycheck Protection Program (PPP) funds is officially on its way. The Small Business Administration's third round of Paycheck Protection Program coronavirus relief lending has steadily grown to top 400,000 loans worth about $35 billion in its first two weeks. Finally, businesses that received PPP loans were not eligible to also take the Employee Retention Tax Credit. 815 N. 4th St, Ste C . That caused application fatigue and frustration," Ron Busby, president of the US Black Chambers, told AP. The Small Business Administration announced Wednesday that it's launching a new portal for small businesses to apply directly for Paycheck Protection Program loan forgiveness through the agency. The Coronavirus Aid, Relief, and Economic Security (CARES) Act , which was signed into law by Donald Trump in 2020, authorized the U.S. Small Business Administration (SBA) to issue loans to large and small business owners under the Paycheck Protection Program (PPP). "The Paycheck Protection Program Is Out of Money. Another $12 billion is dedicated to supporting businesses in low-income and minority communities. 6054785). As an SBA-approved PPP lender, Funding Circle will accept PPP loan applications for first-time and second-time PPP loan applicants as soon as the application is available. If your business wasnt operating for all of 2019, you may have to adjust the quarters you compare to determine where you had a 25% reduction in gross revenue. The loan was facillitated by First National Bank Of Central Texas. The views and opinions expressed in this article are solely those of the author writing in her individual capacity. They were approved on 6/5/2020 by the SBA for an amount of $156,400.00. So far, about $73 billion worth of loans have been approved in the second . If youre self-employed, you can apply for payroll costs based on your net profit for 2020. Similar to your first PPP loan, for the second loan you can receive up to 2.5 times your average monthly payroll costs, which are calculated for the 12 months prior to the loan or for the calendar year of 2019. The percentage of both first- and second-draw PPP loans that had to be used for payroll expenses. Married filing joint phaseout begins at $150,000 and ends at $160,000. 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