Included in the new coronavirus relief bill is help for small businesses. The Paycheck Protection Program now has $284 billion in forgivable, federally backed loans for small businesses.
"This is the second chance," Manny Cosme, the President and CEO of CFO Services Group, said. "If you did not apply the first round, absolutely please make sure you apply for this next round of PPP. For those that did apply you get a second shot at what they’re calling the second draw, so you can apply again if you had decreased revenue over this last year because of the pandemic.”
Applications are not out yet, but watch out for that in the coming weeks.
"Treasury still has to issue the final guidance and then the banks will open up the applications again. So, the applications are not out today, but we hope in the next few weeks it will come out so we can start applying and getting that money again."
Cosme said small businesses do not want to miss this application. Here is what you can do now to get ready to apply.
"You want to make sure you are getting your records in order. They’re going to be looking at payroll records. So this time, however, they can look at 2020 payroll. So you can look at either 2019 or 2020 payroll and that’s what’s used to calculate the amount of the loan," Cosme said. "So make sure you have your payroll records ready. Also, if you are self-employed make sure you have your tax return ready to go. 2020 probably won't be done so you will have your 2019 tax return."
If you're small business already got a PPP loan during the first round, can you get one again?
"The answer is yes," Cosme said. "You had to have a drop in revenue 25 percent, is the criteria that they are looking at. So you can get what they call the second draw."
He continued, "If you missed the first round, you have a second shot. So don’t miss this one if you didn’t get it the first time."
Cosme said this round is a lot more expansive for what you can spend the money on.
“In this round they are actually allowing you to claim more expenses. So on the last round it was 60 percent you had to spend on payroll and 40 percent you could spend on other approved expenses, but there were only a few. Rent, utilities, things like that," he said. "This round is still 60 percent on payroll, but the 40 percent can be spend on a wider range of expenses which is more helpful."
He said that includes things like software, accounting fees, recent property damage, PPE for staff.