Last week, the SBA reopened the Paycheck Protection Program (PPP) and will begin accepting applications for “Second Draw” forgivable PPP loans.
Here is a summary of the eligibility rules for Second Draw loans. Borrowers can draw loans of up to $2 million provided they:
- Have previously received a “First Draw” PPP loan and used the full amount on eligible expenses
- Have 300 or fewer employees
- Document at least a 25% reduction in gross receipts in comparable 2020 and 2019 quarters
PPP borrowers may have their loans forgiven if the proceeds are spent on the following expenses: payroll (including benefits), mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
To receive full forgiveness, borrowers must spend at least 60% of the funds on payroll expenses over an 8-24 week period.
This is a high-level overview; if you have questions about the specifics as they apply to your business, please contact us. We are here to help!
Source: U.S. Small Business Administration
Emily Balmages, CFP®, CRTP
Wealth Advisor, Warren Street Wealth Advisors
Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor
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