Last night at about midnight, the SBA dropped its first round of guidance about PPP Second Draw Loans. This post is a high-level summary of what we believe is new information.  Please note that there are hundreds of specific details not included here.

  • The last day to apply for and receive a second-round PPP loan is March 31, 2021.
  • If you received a first-round PPP loan, you must state that you have or will have used your first PPP loan for authorized purposes on or before the date you receive your second PPP loan.
  • If your aggregate revenue is down at least 25% in 2020 compared to 2019, you are eligible for a second round PPP loan.  This can be used as an alternative to the quarterly option previously offered.
  • Payroll costs are now calculated on either calendar year 2020 or calendar year 2019, instead of the 12 months rolling from the application date.
  • If your loan application amount is under $150 K, you will not be required to provide documentation to prove your revenue loss at the time of application but will have to when applying for forgiveness.
  • Gross receipts include all revenue in whatever form received or accrued (following the entity's accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances.
  • Generally, receipts are considered “total income” (or in the case of a sole proprietorship, independent contractor, or self-employed individual “gross income”) plus “cost of goods sold,” and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms.
  • When making a second-round PPP loan application, you have to certify that your business is not permanently closed and require the funds to support your business's ongoing operations.

As part of our ongoing commitment to educating the community, we will provide a free Aminar on this round of guidance next Monday, January 11th, REGISTER HERE.  Also, MultiFunding is offering interested businesses individualized consulting services on the new programs for those who are interested.