When determining the maximum seconddraw PPPloanamountfor new entities, use the lesser of $2 million or the quotient of: The sum of the total monthly payroll costs paid or incurred as of the date on which you apply for the second draw PPPloan, divided by
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)
How much can you get for a second draw PPP loan?
Businesses that are part of a single corporate group cannot receive more than $4 million of second draw loans in the aggregate. Is a second draw PPP loan right for you? December 27, 2020, authorizes certain borrowers that received a Paycheck Protection Program (PPP) loan to be eligible for a second draw PPP loan.
What are the new PPP loan eligibility requirements?
This new, second PPP loan means new eligibility requirements. To apply, a business must have used up their first PPP loan, have no more than 300 employees, and show a 25% reduction in revenue from 2019 to 2020. For loan amounts under $150,000, the 25% reduction needs to be proven during the forgiveness process.