We have heard from many of you this week, asking questions about this new round of PPP loans. 

This morning, we finally have some concrete information about when you can apply.

Yesterday evening, the SBA announced that the PPP application portal would be fully open on Tuesday, January 19. It will be available to all lenders to submit First and Second Draw loan applications.

The portal has already been partially open this week to some smaller community banks.

Keep in mind, just because the SBA’s portal is open, it doesn’t necessarily mean your bank’s is. If you haven’t received an email or notification from them, you should contact them as soon as possible if you plan to apply for a First or Second Draw Loan.

First Draw PPP Loans are for those of you who have not received a PPP loan before.

Second Draw PPP Loans are for eligible small businesses that previously received a First Draw PPP Loan. The difference in the Second Draw Loan is that you must show at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. 

You will have until March 31 (or until funds run out) to apply for an initial or second-draw PPP loan. Remember, there is no end date set for borrowers to apply for loan forgiveness, but payments begin ten months after the end of your covered period.

Loan amounts will be calculated basically the same way as the last round. You will calculate your average monthly payroll for generally the prior 12 months or either calendar year 2019 or 2020 and multiply by 2.5. If you own a restaurant, that goes up to 3.5. Average health insurance and retirement expenses can also be included in your calculation.

Just like the first round, you need to use at least 60% of the proceeds on payroll, with the rest available for covered expenses.

The maximum amount you can pay an employee within the 24 weeks is capped at $46,154. The maximum amount for an owner is $20,833, or the equivalent of 2.5 months of your last year’s salary.

Covered expenses have been expanded. In addition to rent, utilities, and interest, now business software and supplies are included.

These expenses are a moot point for most of you since you will have 24 weeks to spend a typical 2.5 months of payroll.

Again, this loan will be forgiven if used solely for payroll and covered expenses. And thankfully, it has been determined that these expenses will still be deductible and will not add to your net income.

As before, we are here to help you navigate the application process.