COVID-19 PPP2 Emergency Small Business Loan Q&A

As your bookkeeper is busy wrapping you up for the end of the year and getting w9s for your contractors, we are finally seeing some glimmer of financial relief for small business owners. As most readers are aware, the Senate passed a new pandemic relief package, that was on hold – threatened to be vetoed – but as of Sunday night, Dec. 27th, has been approved. While this package brings much needed aid to ordinary households, it also means more forgivable COVID-19 emergency loans for small businesses.

I helped many of my clients’ businesses gain access to hundreds of thousands of dollars earlier in 2020, and I can probably help you. If you’re a client reading this, we should definitely talk about the possibility of getting a second round of aid for your business.

I thought it would be helpful to drop a quick set of questions and answers to highlight the key points that are part of the bill the Senate passed – so you can get ready to apply.

COVID-19 PPP2 Emergency Small Business Loan Q&A:

Q: What kind of businesses can apply?

A: Qualified business borrowers that are a

  • Business concern
  • Nonprofit organization
  • Housing cooperative
  • Veterans organization
  • Tribal business concern
  • Eligible self-employed individual
  • Sole proprietor
  • Independent contractor
  • Small agricultural cooperative
Q: If I got aid in the first round, can I apply again?

A: If the amount you previously borrowed was less than 2 million, you probably qualify to get a second round of aid for up to 2 million. The limit is lower this time around, to truly focus on helping small businesses.

Q: What financial documentation will I need in order to apply?

A: You’ll need top-line revenue numbers for a 3 month block that demonstrates that you earned at least 25% less in 2020 than you did in 2019. You don’t even need to be caught up on all your bookkeeping, you just need to be able to find your sales numbers. The good news is that you can use any 3 month period – it does not have to fall into what we normally think of as Q1, Q2, etc.

Q: What if my business earned MORE money in 2020 than in 2019?

A: Well, then this aid is really not for you. Keep doing awesome, and make sure you are following GAAP – or Generally Accepted Accounting Practices.

Q: How much can my business borrow?

A: Up to 2.5 times payroll cost – up to $2 million, and businesses in the restaurant and hospitality industry will be eligible for 3.5 times payroll cost up to $2 million – Thankfully, somebody’s recognizing they need more help than just payroll.

Q: What else should I know about?

A: There are specifics around eligible spending, and loan terms. You will also want to make sure you are properly tracking all of your expenses for several years, in case of audit. There will also be tax implications – most looks to be positive – but if you’re not sure, we can help.

The SBA will also be required to provide a simplified application and have it ready within 24 days after a bill is enacted. We’ve all been waiting to see what the outcome of this new pandemic relief bill would be. We just want to take this moment to say that we are passionate about helping small businesses and start-ups of various kinds succeed by helping with all aspects of your financial health – not just bookkeeping. If we can be of assistance in walking you through this, please set up a time to talk on my calendar here. I’d love to be of service.

About the Author Barb Fisher

Barb is the CEO of Fisher Bookkeeping, an outsourced bookkeeping consultancy that provides small businesses with a full-service financial department. Her favorite aspect of work is to break down the accounting to meaningful bits, so entrepreneurs can make a powerful difference in their own business. She's also a power lifter (squat: 215, DL: 270).

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