PPP Part Deuce

Your Breakwater team is always here to help keep you informed, as of January 15, 2021 here is what we know and you need to know!

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law and includes new funding for Round 2 of the Payroll Protection Program.  PPP2 is slightly different from PPP1 in that there are certain “eligibility” requirements so that this new program is available to businesses that need it most. PPP2 Application Forms were released by the SBA on January 8, 2021 for new borrowers (#2483) and previous borrowers (#2483-SD). Filing of applications is through your preferred lender, with community based and minority based lenders processing first.  

First time Borrowers PPP2 eligibility highlights, including but not limited to:

  • Employ 500 or fewer employees and are eligible for other SBA 7(a) loans
  • Sole proprietors, independent contractors, and certain self-employed individuals
  • Not-for -profits, including churches
  • Certain accommodation and food service companies, FCC license holders and newspapers

Previous (PPP1) Borrowers, PPP2 eligibility highlights for a loan not to exceed $2 million, including but not limited to:

  • Used the full amount of PP1
  • Employ 300 or fewer employees
  • Demonstrate at least 25% reduction in Gross receipts in any quarter of 2020, compared to the same quarter in 2019.

Similar to PPP1, current PPP2 loan forgiveness requires that funding be used during a covered period of 8 or 24 weeks for payroll (60%), rent, covered mortgage interest, utilities but now also expands that list to include supplier costs critical to sustaining operations as well as software, cloud computing and accounting costs.  Loan requests are limited to 2.5x average payroll  and 3.5x average payroll for those in the hospitality industry. SBA guidance clarifies these items more specifically.

Additionally, a simplified forgiveness application for loans of $150,000 or less will be available to borrowers through their lenders within 24 days of the bill’s enactment. This can be used for both PPP1 and PPP2.  And equally important, business deductions used for PPP forgiveness have been saved in this new bill.

Your breakwater team is here to play a supporting role as you work to secure these funds during Part 2 of the Payroll Protection Program.  We have already rehearsed and are ready to assist you! Please contact Mary Hambleton if you are planning to participate in Part 2 of the Payroll Protection Program and would like the support of your Breakwater team. 

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