If you let employees go due to economic factors, you’ll need to rehire or replace them before applying for forgiveness. You need to maintain the same number of employees on your payroll. If you spend less than 60% of your loan on payroll costs, your forgivable amount will be reduced proportionally. The remaining 40% can be spent on other PPP loan eligible expenses. You must spend at least 60% of your loan on payroll costs. This period begins on the day you receive your first PPP loan disbursement from your lender. 8 to 24-Week Coverage PeriodĪll eligible expenses must be incurred over the 8 to 24-week coverage period. There are 4 main factors to consider:įollow our PPP loan checklist to help keep you on track for loan forgiveness. To be eligible for complete loan forgiveness, you’ll need to make sure you use your PPP loan appropriately. Worker protection expenditures: Expenses for investments in personal protective equipment and other expenses that help your business comply with federal or state health and safety guidelines.Property damage costs: Costs related to property damage incurred by public disturbances in 2020 that aren’t covered by your insurance.Supplier costs: Essential contracts and purchase orders necessary to keep your business going.Operations expenditures: Software, cloud computing, human resources, or accounting-related expenses.The first rollout included payroll costs, utility expenses, and rent, but the 2021 PPP loans include: This time around, the PPP has included additional eligible expenses. Maximum loan amounts have been crunched from $10 million to $2 million for second-time loan borrowers.īusinesses in special industries (like food, travel, and hospitality) are eligible for loan amounts equal to 3.5 times their average monthly payroll costs.
You’re eligible for a PPP loan equal to 2.5 times your average monthly payroll costs. Second-draw PPP loan amounts are calculated similarly to the original PPP loans. Quarterly Receipts: Compare your gross income in any quarter in 2020 with the gross income in the same quarter in 2019.Tax Returns: Compare the annual gross receipts you reported on your tax returns for 20.You have two different ways you can show a 25% or greater reduction in revenue: You must be able to prove a 25% or greater loss in gross revenue.You need to have 300 or fewer employees (if you have multiple locations, each location can have no more than 300 employees).Your business must have been operational before February 15, 2020.
#Blue acorn 2nd draw full#
To keep US small businesses afloat, the government has approved the second round of funding to provide additional PPP loans. However, the global pandemic has lasted longer than initially predicted, and businesses are still fighting to adapt to the New Normal. These loans provided a lifeline to small businesses and employees across the country impacted by the COVID-19 pandemic. Loan averages hovered around $107,000, with 87% of the loans going for less than $150,000. Last year, the Paycheck Protection Program (PPP) provided forgivable loans to more than 5.2 million businesses.
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