As mentioned here, more than $284 billion has been allocated to the U.S. Small Business Association (SBA) for first and second PPP forgivable small business loans known as PPP2. Christianson was an integral part of the application process of over 4 million dollars in the first round of funding and now because of the continued strain on small businesses due to COVID-19, owners can apply for a second round. This program is only open until March 31, 2021. Here are the highlights of PPP2:
PPP2 loans will be available to first-time qualified borrowers as well as businesses that previously received a PPP loan. For those PPP loan recipients from the first round, you may apply for another loan of up to $2 million if you:
- Have 300 or fewer employees
- Have already used or anticipate using the full amount of your original PPP loan
- If you have documentation indicating a 25% gross revenue decline in any one quarter this year compared to the same quarter in 2019.
PPP2 is opening access to these funds to the following applicants who were not previously considered during the first round of PPP loans:
- Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans.
- Sole proprietors, independent contractors, and eligible self-employed individuals.
- Not-for-profits, including churches, and the addition of 501c6’s
- Accommodation and food services operations (those with North American Industry Classification System (NAICS) codes starting with 72) with fewer than 300 employees per physical location.
The bill allows borrowers that returned all or part of a previous PPP loan to reapply for the maximum amount available to them.
Tax deductibility for PPP expenses
The bill also specifies that business expenses paid with forgiven PPP loans are tax-deductible. This supersedes previous IRS guidance which identified that these expenses could not be deducted.
Our team is actively reading the new Bill and will continue to provide information on additional guidance as it’s released. If you have any questions as it relates to the PPP2 eligibility of your business, contact our experts today. We’re here to help.[button_1 text=”Contact%20Christianson%20Today!” text_size=”15″ text_color=”#ffffff” text_font=”Lato;google” text_letter_spacing=”1″ subtext_panel=”N” text_shadow_panel=”N” styling_width=”30″ styling_height=”20″ styling_border_color=”#ffffff” styling_border_size=”5″ styling_border_radius=”23″ styling_border_opacity=”100″ styling_gradient_start_color=”#1b335d” styling_gradient_end_color=”#1b335d” drop_shadow_panel=”N” inset_shadow_panel=”N” align=”center” href=”https://www.christiansoncpa.com/contact-us/”/]
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We are following several resources for additional information including the IRS, Journal of Accountancy, USDA, and more. Stay tuned for more information as it’s released!