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PPP-Paycheck Protection Program

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PPP loans are being extended through May 31, 2021, with certain PPP requirements being revised, and permitting second draw PPP loans. The Interim Final Rule allows individuals who file an IRS Form 1040, Schedule C to calculate their maximum loan amount using gross income, removes the eligibility restriction that prevents businesses with owners who have non-financial fraud felony convictions in the last year from obtaining PPP loans, and removes the eligibility restriction that prevents businesses with owners who are delinquent or in default on their Federal student loans from obtaining PPP loans.

Please note that Small Businesses with fewer than 20 Employees had a two-week window of priority, that window was opened on February 24, 2021 and closed on March 9, 2021, at that time all businesses (including small businesses to large corporations) applications began processing, which can cause funds to possibly be depleted. If you are a small business get your applications submitted ASAP.

If you are looking to apply for a PPP Loan, you will first need to determine if you qualify for the 2nd round of PPP (the 1st round was from March 2020 to August 2020). The qualifications are different and depends on whether you are applying for your first or second PPP Loan.

Who May Qualify

The following entities affected by COVID-19 may be eligible:

  • Sole proprietors, independent contractors, and self-employed persons
  • Any small business concern that meets SBA’s size standards (either the industry size standard or the alternative size standard)
  • Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
    • 500 employees, or
    • That meets the SBA industry size standard if more than 500
  • Any business with a NAICS code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location

 

2021 PPP Loan Requirements:

First Draw PPP Loans

If the following statements apply to your business, you are elgible to appy for your first draw PPP Loan:

  • Your business existed and was operational BEFORE February 15, 2020.
  • Your business is currently open and operational.
  • You have no more than 500 employees and/or if your business has multiple locations, you do not have more than 500 employees per location.

Second Draw PPP Loans

If the following statements apply to your business, you are elgible to appy for your second draw PPP Loan:

  • You have exhausted (used) all of your first PPP Loan.
  • Your business existed and was operational BEFORE February 15, 2020
  • Your business is currently open and operational.
  • You have no more than 300 employees and/or if your business has multiple locations, you do not have more than 300 employees per location.
  • You can show a 25% or more loss in gross revenue from 2019 to 2020 (loss can be shown yearly or quarterly, to use the quarterly method the loss must be in the same comparable quarters, i.e. compare 1st quarter of 2019 to 1st quarter of 2020, if 2020 1st quarter is 25% or more less than 2019 1st quarter, then you have met the gross revenue reduction requirement). 

YOU DO NOT QUALIFY IF ANY OF THE FOLLOWING STATEMENTS ARE TRUE:

  • Your business did not exist and/or was not operable prior to February 15, 2020.
  • If your business is currently not operating (no longer in business).
  • You only employ household employees, such as babysitters, housekeepers, etc... (household employees doesn't qualify the payor as a business)
  • If any owner with 20% or more business ownership has a prior criminal record that involved any type of fraud.
  • If you are any business owned and/or controlled by you and/or others, is deliquent and/or has defaulted on a loan from the SBA and/or any other Federal agency within the last seven years (this excludes federal student loans).
  • You or your business and or any owners of said business is bankrupt or is currently in bankruptcy proceedings.
  • You are an officer or key employee of the lender with whom you are applying with, or a close relative of one, if so, you may only apply for the PPP Loan Funds with an unaffiliated lender).
  • Your business is a hedge fund or private equity firm.
  • Your business is in an industry that is normally not eligible for SBA 7(a) loans, such as MLM entities. 

PPP Loan Additional Requirements by entity type:

Independent Contractors:

If an Independent Contractor is applying for a PPP Loan, the IC will need a tax-ready (meaning ready to be filed with the IRS) 2019 and/or 2020 Schedule C Form form your personal 1040 tax return. It does not have to be filed, however, it must be complete and accurate and you must intend to file said tax form(s) with the IRS. You will also need your form 1099-MISC from 2019 and/or your form 1099-NEC from 2020. (You must have reported a net profit on your Schedule C in 2019 and/or 2020.

Sole Proprietorships (SP) and Single Member LLC's (SMLLC):

If a Sole Proprietor and/or SMLLC is applying for a PPP Loan, the SP and/or SMLLC will a tax ready 2019 and/or 2020 Schedule C from your personal tax return. It does not have to be filed, however, it must be complete and accurate and you must intend to file said tax form(s) with the IRS. If you had employees on payroll and withheld taxes from their earnings, you must have payroll tax forms 940 and 941/944 for 2019 and/or 2020.

Parnterships (LLC's with more than one member/partner and file form 1065):

Individual partners should not submit separate applications, only one application should be submitted on behalf of the entire Partnership. If you had employees on payroll and withheld taxes from their earnings, you must have payroll tax forms 940 and 941/944 for 2019 and/or 2020. PPP Loans also provide coverage to partners that can't take a salary (as partners are not allowed to be on payroll), however, you can include their self-employment earnings as reported on their Schedule K-1 capped at $100,000.00 and multiplied by 0.925.

S - Corps:

Only S-Corps who have payroll are eligible for the PPP. If the only payments you recieved, as the owner, were from owner draws and/or distributions and did not pay payroll taxes on said earnings, the PPP Loan is not suitable for you nor can it be used to cover your earnings/payouts, however, if you had other employees on payroll then you can apply based on the payroll paid to employees.  If you had employees on payroll and withheld taxes from their earnings, you must have payroll tax forms 940 and 941/944 for 2019 and/or 2020.

C Corps:

Only C-Corps who have payroll are eligible for the PPP. If the only payments you recieved, as the owner, were from owner draws and/or distributions and did not pay payroll taxes on said earnings, the PPP Loan is not suitable for you nor can it cover your earnings/payouts, however, if you had other employees on payroll then you can apply based on the payroll paid to employees.  If you had employees on payroll and withheld taxes from their earnings, you must have payroll tax forms 940 and 941/944 for 2019 and/or 2020.

Non-Profits:

Will have to had ran payroll in 2019 and/or 2020 to qualify for the PPP Loan. Faith-based orgainizations should also check the SBA guide on eligibilty.

 

Applying for the PPP Loan

On January 6, 2021, the SBA released to sets of applications: one is for First Draw PPP Loans and another one for Second Draw PPP Loans.

PPP Loan applications are being accepted for them both and is set to expire on May 31, 2021.

You can check with your lender on submitting an application through them or you can contact us and have us submit your application on your behalf to our Partner's bank network (we are partnered with a company that is affiliated with mutliple banks, our partner will match you with the bank that is most likely to approve your application). 

If you would like to utilize our services, please complete the PPP Loan application that apply to you.

 

 

(PLEASE NOTE THAT WE ARE NOT A LENDER AND DO NOT HAVE A DIRECT LINE OF COMMUNICATION WITH THE SBA, NOR ARE WE AFFILIATED AND/OR PARTNERED WITH THE SBA. WE DO WE HAVE ANYTHING TO DO WITH THE APPROVAL AND/OR THE DENIAL OF ANY LOANS)

 

Upon completing the application that applies to you, please click on one of the options below to schedule your consultation.

 

  • Need assistance applying for the PPP, or you can't find a Lender?  CLICK HERE
  • Need assistance applying for the PPP Loan Forgiveness? CLICK HERE