The US Small Business Administration has approved, and lenders will now be open for funding of PPP1 and PPP2 first and second round draws loans as of Monday January 19, 2021. They anticipate there will be enough funding for all borrowers for PPP2. as is the case for round 1, round 2 loans also qualify for complete forgiveness if the funds are used on qualified eligible costs. For round 2 purposes the list of eligible costs has been expanded. The maximum loan amount is $2 million, and the loan is based on 2.5 x average monthly payroll costs (or 3.5 if hotel or restaurant).
To be eligible for a PPP2 second round loan draw borrowers must have:
1) 300 or fewer employees.
2) Have used the full amount of the PPP1 loan prior to disbursement of PPP2 loan.
3) Revenue reduction; must have experienced a 25% or more reduction in gross revenues in all or part of 2020 as compared with all or part of 2019.
Items that will be requested by lender for PPP2 loan application are as follows;
1) Payroll register or payroll tax documents.
2) Drivers License
3) Bank Statements starting February 2020.
4) A cancelled check for business account where PPP funds would be deposited.
5) Copy of PPP1 loan document including SBA loan amount and Etran loan #.
If you are thinking about applying for a PPP2 loan or have questions or need assistance, feel free to contact our office via phone or email, 248-524-5240 or jforan@franskoviakcpa.com or mike@franskoviakcpa.com
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