As we continue to monitor the current COVID-19 situation and how it might be affecting our partners, we want to provide you with information that can help you continue navigating this challenging time. On December 27, 2020, a new $900 billion COVID-19 relief package was signed into law. Included in that package is an additional $284 billion for the Paycheck Protection Program (PPP). This PPP supports small business organizations that have been hit by COVID-19 and need a second forgivable loan.
If your organization received an initial PPP loan, you may qualify for a second round of funding, provided your organization meets the following criteria:
Has no more than 300 employees.
Has used or will use the full amount of your first PPP loan before the second round disbursement date.
Is not permanently closed.
Can show a drop of at least 25% in annual gross receipts or for any quarter of 2020, compared with the same quarter in 2019.
This PPP is also available for first-time borrowers under a set of rules and regulations similar to those outlined in the previous PPP round.
Second-draw funds are forgivable, provided they are spent to cover the following:
Payroll and operating costs. Keep in mind that at least 60% of the total loan amount must be used on payroll expenses to qualify for full loan forgiveness.
Property damage sustained during protests and disturbances in 2020.
Payments to a supplier covering contracts.
Personal protective equipment.
Your organization will need to submit documents to verify payroll costs and revenue loss to apply for a PPP loan, such as tax forms or bank statements. You can avoid some paperwork by using the same lender from your initial PPP, provided you use payroll figures from 2019. Check with your lender to see if it is planning to offer second-draw loans. Applications will be accepted until March 31, 2021.
Your haku family is here to help you navigate through these unique times. If you have any questions or would like to discuss other ways we can help your organization, please let us know. We are all in this together. For The Long Run.
Check out these resources to learn more about the second-draw PPP loan:
Ready to apply? Here are some options:
Please note that any information provided by haku on this matter does not, and is not intended to, constitute legal advice; instead, all information, content, and materials made available are for general informational purposes only. Information provided may not constitute the most up-to-date legal or other information. Any recipient of the information provided should contact their attorney to obtain advice with respect to any particular legal matter and should act or refrain from acting on the basis of information without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.