PPP Extended Until May 31! File Now!
Updated: May 2, 2021
To all those business owners that have already filed their first round of Paycheck Protection Program (PPP), you can now file for the second one!
In the past, the Small Business Administration (SBA) had a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees, from February 24 to March 9, 2021. Luckily, the SBA offered an extension for the application of the PPP loans until May 31, 2021, giving all business owners more time to apply and receive support before the program expires. This new application however now allows eligible gig workers, independent contractors, self-employed, and other small business owners to use the gross income to calculate the maximum loan amount so you can protect and support your business.
If this is your first time filing, however, you aren’t late for the action. Here are the necessary information and requirements from the SBA that are worth looking into to be well guided.
There may be an extension for the PPP deadline but it wouldn’t hurt to start filing now when you’ve got the chance to!
For all those who are filing for the PPP the second time, look into the requirements below. Take note of the needed documents based primarily on SBA’s website and from various sources.
1. In order to qualify for the Second Draw of a PPP loan, a borrower must:
Have previously received a First Draw PPP loan and will or has used the full amount only for authorized uses
Has no more than 300 employees; and
Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
2. Find a lender
Get matched with a lender, or find lenders within your area.
3. Completed PPP application form
Just simply download and complete the SBA PPP application, Form 2483 (or 2483 SD), from the SBA website.
4. Proof of payroll or income
5. Unexpired, government-issued driver’s license or passport (for all owners over 20%)
Each owner must be accounted for in the PPP application form and require a copy of a government-issued photo ID such as a state-issued driver’s license or passport.
6. Voided check
So the lender can deposit approved funds into your account, you may be asked to provide a voided check. Some lenders (but not all) may accept electronic funds transfer information by other means.
What else do I need to know?
How is this different from the first application?
During the first PPP Loan, gig workers, self-employed, and businesses with less than 500 employees negatively impacted by the pandemic have applied for their first PPP loan. On the second one, which has been extended, gig workers or people that have a business with less than 300 employees and experienced more than a 25% drop in revenue quarter over quarter from the previous year can apply.
For sole proprietors, will I be able to loan for corporations?
If you’re a sole proprietor, you can only get one of these two options, the PPP loan, or EDD unemployment. If you are already getting checks from PPP, then you cannot qualify in the latter.
Do I need to have employees to qualify for this?
No, you don’t need to have employees, especially if you are an LLC. You just need to have those aforementioned documents.
Is this the same as an EIDL loan?
This is a completely different loan that is forgivable if done correctly, whereas EIDL is not.
Do I have to file my 2020 tax returns before I get this?
You can either use your 2019 business taxes or draft your 2020 taxes.
Is this loan forgivable?
Based on SBA terms, yes. You can apply for forgiveness once all loan proceeds have been used. You can apply for forgiveness any time up to the maturity date of the loan. However, if you fail to apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred.
How do you apply for loan forgiveness?
To apply for forgiveness of your PPP loan, you must complete this application as directed in these instructions, and submit it to your Lender.
Want to learn more about the PPP extension?
Amended on several instances during the previous year, the PPP loan program was established by Sections 1102 and 1106 of the Coronavirus Aid, Relief and Economic Security Act (Pub. L. 116-136), which officially became law on March 27, 2020. The PPP loan program ceased making loans in 2020 due to the pandemic, to provide financial relief to help hard-hit small business owners keep their workforce employed in the midst of the pandemic.
The Economic Aid Act extends SBA’s authority to create PPP loans, starting on the week of January 11, 2021, and continuing to March 31, 2021, with revised terms. Nearing the date of the extension, however, it further extended to May 31. The SBA reopened the PPP to first-time eligible borrowers of which each was provided a First Draw PPP Loan based on the revised criteria and gave a similar opportunity to a smaller group of harder-hit eligible borrowers for each of them to obtain a Second Draw PPP Loan based on the same general terms.
As the economy continues to struggle from the adverse effects of the pandemic, the law continues to provide additional support to many small businesses, giving them a chance for restoration.