A Paycheck Protection Program (PPP) loan is a potentially-forgivable government-backed loan designed to help small businesses and nonprofits that have experienced business disruptions due to the COVID-19 pandemic. Borrowers who are eligible can qualify for up to 2.5 times their monthly payroll costs. Such PPP loans can be used to pay for payroll and other related expenses. Eligible expenses incurred/paid for during the 24-week period following receipt of loan funds may be eligible for loan forgiveness.

Your business needs to meet the following criteria to qualify for a PPP loan:

• The business was in operation as of February 15, 2020.
• Number of employees: 500 or less
• You’re a sole proprietor, self-employed individual, independent contractor, or business partner. But, only one PPP application can be submitted per partnership.
• You have employees and you paid salaries and payroll taxes for them that are reported on Form 1099-MISC. (Although you cannot include 1099 payments in payroll calculations.) This also applies to paid independent contractors.
• You are a small business concern according to the SBA’s definition.
• And certify that:
• Economic uncertainty makes your loan request necessary.
• You’ll use the funds to maintain payroll, retain workers, and/or make payments on leases, mortgages, and utilities.
• You don’t have a current PPP loan or EIDL application for the same purpose (over the same period).
• From February 15, 2020 to December 31, 2020, you did not receive a PPP loan or EIDL for the same purpose (over the same period).

PPP loans are intended to help small businesses maintain payrolls and continue necessary payroll-related payments like rent and utilities. The full allowable uses of the loan are:

• Payroll costs:
  • Compensation in the form of wages, salaries, commissions, or similar compensation up to $100,000
  • Payment of cash tips or equivalent
  • Payment for parental, family, vacation, medical, or sick leave
  • Allowance for separation or dismissal
  • Payment of retirement benefits
  • Group vision, dental, disability, or life insurance
  • Payment of local or state taxes assessed on the compensation of employees
• Healthcare costs during periods of sick, medical, or family leave, related to the continuation of group healthcare benefits as well as insurance premiums.
• Mortgage interest payments. But excluding prepayment or payment of the mortgage principal)
• Rent
• Utilities
• Interest on any other debt obligations incurred before February 15, 2020
• Refinancing an SBA EIDL received between January 31, 2020, and April 3, 2020
• Covered expenditures such as business software or cloud computing services that facilitate:
  • business operations
  • product or service delivery
  • the processing, payment, or tracking of payroll expenses, human resources, sales, and billing functions
  • accounting or tracking of inventory, supplies, records, or expenses
• Covered property damage costs
• Covered supplier costs
• Covered worker protection expenditures`

Yes, PPP funds are still available. Through the PPP Flexibility Act, the program was reopened in January 2021. Applications are open till March 31, 2021, or till the funds are exhausted, whichever comes first.

You may be able to get a Second Draw if the funds from your initial PPP loan were not enough to help you overcome the challenges brought on by the Coronavirus pandemic.
To qualify for a Second Draw, you need to meet the following criteria:

• Your business has fewer than 300 employees
• You can show a 25% revenue reduction during any quarter of 2020 relative to the same quarter in 2019, or if you were in business for only the third or fourth quarter of 2019, you can show a reduction in revenue when compared against any quarter in 2020

You can apply for 3.5 times your monthly payroll costs for your Second Draw if you own a restaurant, hotel, or live venue that falls under a NAICS code starting with “72,”.
You can receive a maximum amount of $2 million for a Second Draw. The aggregate total amount that any borrower can receive from a First Draw and Second Draw PPP loan is $10 million. Businesses within a corporate group can receive an aggregate total amount of $20 million.

Applications will remain open until March 31, 2021, or until funds are exhausted. Through an extension of the PPP Flexibility Act, the program was reopened in January 2021.
Signed into law on June 5, 2020, the PPP Flexibility Act has provided previous expansions to the program aimed at increasing flexibility for borrowers.

After a borrower receives a Preferred Lender Program (PLP) number for their loan, the loan is approved by the SBA, and funds are reserved for the borrower. From the date on which a borrower receives a PLP number, the lender has 10 calendar days to disburse funds. The loan must be disbursed in its entirety and the 24-week loan forgiveness period begins on the day on which the loan is disbursed.
If a lender cannot disburse funds due to delays from a borrower (like missing paperwork) the lender has 20 days to disburse funds. The loan will be canceled if they do not receive the necessary information from the borrower by the end of that 20-day period. If funds from the loan are designated for the refinancing of an Economic Injury and Disaster Loan (EIDL), the funds will be deducted from the disbursement amount and paid directly to the SBA by the lender.

For portions of the loan that are not forgiven, payments are deferred for the first 10 months. But keep in mind that interest will accrue during the 10-month deferral period.