In: Grow Your Business

Starting this week, the second round of PPP (PPP2) is now open for small businesses with fewer than 300 employees. Concrete lifting, concrete repair, and decorative concrete businesses are all eligible to receive funds.

Let’s get to the point:

  • If you took out a PPP loan in the first round you can still get a loan in the second round.
  • If you have not filed your loan forgiveness paperwork for the first round yet, that’s ok, you can still apply for PPP2. Many banks are telling their borrowers that if they borrowed less than $150K in the first round, they can wait until the simplified, 1-page forgiveness form comes out at the end of January.
  • To be eligible for a PPP2 loan you have to be able to show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.
  • You will NOT have to pay taxes on any funds you get from PPP loans.

In addition to payroll, utilities, rent, and covered mortgage interest, the following are also forgivable:

  • The COVID-19 federal health and safety guidelines that were mandated for worker protection and facility modification, including PPE, addition of ventilation or filtration systems, the addition of outdoor business space, and other assets relating to compliance with federally mandated requirements.
  • Disability Insurance, Life Insurance, Dental and Vision Insurance are all included in the 2nd round of PPP.
  • Covered operating costs such as software and cloud computing services and accounting needs.

The amount of your loan will be all of these monthly expense items added together, then multiplied by 2.5. BUT, borrowers will have to spend no less than 60% of the funds on payroll to be eligible for full loan forgiveness – the same parameters as in the original PPP.

When it comes time to fill out your application, you can use either 2019 or 2020 data to estimate your monthly costs in your PPP application.

Loan Forgiveness

The SBA will create a simplified forgiveness application process for loans of $150,000 or less.

A borrower will receive forgiveness if they sign and submit to the lender a certification that is not more than one page in length, includes a description of the number of employees the borrower was able to retain because of the loan, the estimated total amount of the loan spent on payroll costs, and the total loan amount. Easy.

If you remember, the first round of loans were gone within days after the SBA launched the program. For Round Two, the SBA included a fixed portion of funds carved out for a specific sub-set of small businesses. Specifically, $35 billion is set aside for first-time borrowers, $15 billion of which will be set aside for smaller, first-time borrowers with 10 or fewer employees. In all, there is $900 billion in the pot for ALL businesses for this round.

BEAR IN MIND: a sale of your business could muddy the waters on receiving forgiveness of the PPP loan. If you are considering selling your business, check the SBA’s guidance to be sure that forgiveness will still be available.

Bottom Line: If you want to add a new rig to the business, expand your advertising or marketing, or add to your office team, these funds can help you get there. Contact your bank and let them know you want to apply as early as you can.