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.
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
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