Paycheck Protection Program – Round 2 Can Help Struggling Startups

FAQs

Covid-19 has affected Silicon Valley companies unevenly. Although many are doing quite well, some companies – especially those in marketing, retail, and consumer packaged goods – are barely surviving. More broadly this is true about businesses in the US; for example, around one-sixth of all restaurants operational a year ago have shut down. Keeping this in mind, the US Government and Small Business Administration (SBA) recently started the second round of the Paycheck Protection Program (PPP), and your company may be able to get a forgivable loan if it satisfies a few conditions. Given below are a few frequently asked questions and answers.

Paycheck Protection Program – Round 2 Can Help Struggling Startups

Yes. The program is open both for first-time borrowers and borrowers looking for a second loan. However, the requirements are different for first-time versus second-time borrowers. Also, just qualifying as an eligible business does not guarantee that a PPP loan will be given.
In addition to the businesses that were eligible in the first round of the PPP, during this round, the program includes entities that are 501(c)(6)s, destination marketing organizations (DMOs), housing cooperatives, newspapers, broadcasters, and radio stations. Additionally, for first-time borrowers to qualify for eligibility, the entity can employ no more than 500 employees.
In order to be eligible for a loan, first-time businesses must have been in operation on February 15, 2020.
The maximum cap on loans (both first-time applicants and second draw borrowers) for the PPP is $2,000,000. In your application you will be requested to submit certain documentation that will determine the amount your business is eligible. Please be advised that borrowers are not guaranteed the full amount requested in their applications.
In addition to the expenses that were eligible under the previous round (payroll, rent and utilities), both first-time and second-time borrowers may use their PPP loan to cover the following expenses: covered operations (software, cloud computing, and other human resources and accounting needs); property damage costs due to public disturbances that occurred during 2020 and were not covered by insurance; covered supplier costs; and covered worker protection expenditures (PPE) as determined by state governments, the CDC, OSHA and HHS.
For a second draw, eligible businesses that received a prior PPP loan must:
  • Have used the full amount of its first PPP loan to apply for a second draw.
  • Have 300 or fewer employees.
  • Can demonstrate at least a 25% reduction in gross receipts from the corresponding calendar quarter of 2019 to that of 2020.
You can apply at ppploans.cbwpayments.com for second round or first round PPP loans – even if you applied and received loans from another bank previously.
In general, borrowers can calculate their aggregate payroll costs using data either from the previous 12 months or from calendar years 2019 or 2020. For seasonal businesses, the applicant may use average monthly payroll for the period between February 15, 2019, or March 1, 2019, and June 30, 2019. An applicant that was not in business from February 15, 2019 to June 30, 2019 may use the average monthly payroll costs for the period January 1, 2020 through February 29, 2020.
While borrowers can apply in this round of PPP by March 31, 2021, you should apply as soon as you are able to – this is a first come first served process.
Scry Analytics has joined forces with CBW Bank so that its technology can be used by this community financial institution for providing loans quickly and easily. You can apply at ppploans.cbwpayments.com. You can find more answers by sending an email to contactus@scryanalytics.com or sbappp@cbwbank.com