The December 27, 2020 stimulus bill updated the CARES Act and the requirement for the EIDL Advance to be excluded from the amount of the PPP Loan eligible for forgiveness.
Guidance was recently issued by the SBA for applications already submitted, the SBA will be remitting a payment to the PPP Lenders for the EIDL Advance. The PPP Lenders will then remit the advance back to the borrowers. No additional request is needed for the remittance for the advance payments.
2nd Round of PPP Loan Program
The Paycheck Protection Program of forgivable loans will reopen on January 11, senior Trump administration officials said Friday, as Congress extends efforts to preserve jobs and help businesses weather the coronavirus pandemic and related lockdowns. Only community-based lenders, such as community-development financial institutions and minority depository institutions, will be allowed to process loan applications for at least two days when the program reopens. Additionally, the program is open only for first-time borrowers until Wednesday, January 13, when repeat applications will be accepted. The new iteration of PPP will be far smaller than the original, at $284 billion, well below the $525 billion made available in the first round, which ran from April to August last year.
To qualify for this 2nd round of funding, you must be able to prove your collections were down by 25% or more for any calendar quarter in 2020 compared to your 2019 collections. You must apply for PPP2 by March 31, 2021, but because the available amount is smaller, we are recommending that if you qualify, you should apply as soon as possible.
Finally, if you experienced a 50% quarterly reduction in revenue in 2020, or your business was suspended by a government mandate, you may be eligible to take advantage of the Employee Retention Credit. Please contact your BWTP Team Member if you think you may qualify for this credit.
We are trying to keep you informed of law changes and guidance as it becomes available. If you have any questions about any of these issues, please contact us.