Multiply the average monthly payroll costs from Step 2 by 2.5. This is your maximum PPP loanamount.
People also ask
How do I show revenue reduction for the second PPP loan?
The first way of showing a revenue reduction for the second PPP loan is to compare the annual 2019 and 2020 receipts. This is if your business was operational. In all four quarters of 2019, you can show a reduction of annual receipts of 25% or greater in 2020 compared to 2019.
How are PPP loans calculated?
In 2020, PPP loans were calculated using your 2019 payroll costs and net profit. But for PPP loans after March 3, 2021, you have the option of using your 2019 or 2020 payroll costs and gross profit. For loans approved prior to March 3, 2021, applicants had to use their 2019 or 2020 net income (as reported on line 31 of their Schedule C)
Are you eligible for a second draw PPP loan?
For example, if you had $50,000 in gross receipts for the second quarter of 2019, and gross receipts of $30,000 in the second quarter of 2020, then you鈥檝e experienced a 40% revenue reduction between the quarters and are therefore eligible for a Second Draw PPP loan (assuming all other eligibility criteria are met).
How much of a PPP loan is forgivable?
Due to high demand for PPP loans, a maximum of 25% of the loan amount used for eligible non-payroll costs is expected to be forgivable. For detailed guidance on PPP loan forgiveness, read the U.S. Small Business Administration鈥檚 loan forgiveness application and instructions.