PPP Loans #1 and #2
PPP loans are still being issued. Both PPP #1 and PPP #2 programs are lending money, and they have BILLIONS left to give out. As it stands, the program is set to end on 3/31/2021. So make sure to apply, as now is the time to act and see if you’re eligible.
PPP #1 is available to any business based on 2019’s numbers. The loan amount calculation varies for single-member LLCs and partnerships and corporations. But I can tell you this if you had a profit and if you paid yourself in 2019, you qualify for a PPP #1 loan.
If you already received PPP #1, used it, and suffered a greater than 25% REVENUE (SALES) loss in any 2020 quarter, compared to that same quarter in 2019, you qualify for PPP #2. Even if you didn’t get PPP #1 forgiveness yet. See some examples below:
For PPP #2, the loan amount calculation is either based on 2019 or 2020, whichever is more advantageous to you. At a minimum, it’s a loan for a few months to get you through whatever is ahead. But if the money is used properly, it’s tax-free money. I said that you read that, go ahead, reread it. TAX-FREE MONEY! You’re welcome!
PPP #1 Forgiveness
PPP #1 forgiveness is also something on a lot of people’s minds. Some banks are aggressively badgering business owners to apply for forgiveness. But in reality, you have ten months from the end of your 24 week period. For our clients, the earliest forgiveness application due date for PPP #1 is July 22, 2021, so you have plenty of time. There is no rush as far as we’re concerned, and from what we’ve seen, forgiveness is getting easier and easier as we go on.
Employee Retention Credit
This credit has gained steam as the stimulus bill passed just after Christmas allows businesses to take advantage of both the PPP and the ERC. Previously, it was one program or the other, and most businesses chose the PPP loans as they were easier to understand.
While we’re still waiting for more information on this and how certain scenarios will play out, we have a fairly good understanding of what qualifies and what doesn’t. If you paid employees between 3/12/20 and the day you received PPP money, this might be something that you qualify for.
This is a credit based on wages paid to employees, so if you believe you’re eligible, check with your payroll provider to see how they’re handling the credit. We know that ADP, Paychex, Gusto, Heartland, and Premier are assisting their customers in getting this credit.