By: First Union
Could Your Business Qualify for Money with New PPP Updates?
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Recently the SBA has made some updates to the PPP. Small businesses could potentially be eligible for more funds under some of the newest guidelines. Keep reading for more…
1. If a loan is under 2 million you fit the criteria for forgiveness
This means that you don't have to go above and beyond to prove that COVID-19 negatively impacted your company. You do still have to meet the other forgiveness requirements, especially in terms of tracking where the money is spent. The SBA may be clarifying this in the future, but for right now this one still stands in regard to payroll versus other expenses. What the new guidelines state specifically is that: "Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith."
2. Those small businesses structured as partnerships and seasonal employers can return for additional money
This is a new PPP interim rule. Essentially, these businesses previously were really offered no definitive guidance in terms of how much or what they qualified for. The new language now included says: "This interim final rule authorizes all PPP lenders to increase existing PPP loans to partnerships or seasonal employers to include appropriate amounts to cover partner compensation [...] or to permit the seasonal employer to calculate its maximum loan amount using the alternative criterion posted on April 28, 2020."
So basically, if the original PPP loan did not have partner compensation included, they can now go back and add in more money to cover the partner.
As far as seasonal employers are concerned, the new guideline lets them calculate the maximum PPP loan allowed based upon the average total monthly payroll payments beginning Feb 15, 2019, and ending on June 30, 2019. They can also instead choose to determine the loan amount based upon any consecutive twelve-week period between May 1, 2019, and Sept. 15, 2019.
3. The PPP still has some money left. For those who haven't applied, the time is now
As of the first week of May, there are approximately 120 billion left in available funds through the PPP. And while that may not potentially be enough to help stimulate a full recovery as far as American small businesses are concerned, that doesn't mean this money can't help many who are currently struggling to make ends meet. A number of small US businesses will most likely find that it is worth applying for a PPP loan. This can be done through banks, credit unions, and other lenders throughout the country.
At First Union Lending we are here to help small companies throughout the nation navigate the PPP process. While the first round of funding did see some issues arise, such that may have disheartened many, with this second round Congress and the SBA have sought to fix some of the issues. As mentioned, there is still money left—money that could certainly help right now. Call today and let's get started!