COVID-19 Relief Bill: Paycheck Protection Program Update

The U.S. Small Business Administration (“SBA”) announced on January 8, 2021 that the Paycheck Protection Program (“PPP”) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. Initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. It is expected that the PPP will be open to all participating lenders shortly thereafter.
 
As a reminder, for borrowers who are considering a Second Draw PPP Loan, there are requirements that need to be met in order to be eligible. Eligible borrowers for a Second Draw PPP Loan will generally be eligible if:
 
  • Previously received a First Draw PPP Loan and will or has used the full amount of the loan on qualified expenses
  • Has no more than 300 employees
  • Experienced at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
 
It should be noted that Second Draw PPP Loans are generally subject to the same terms, conditions and requirements as First Draw PPP Loans.
 
Please reach out to your Bowers representative if you have experienced the required revenue deduction, need assistance in making that determination or have any other questions or concerns.

Disclaimer: To ensure compliance with requirements imposed by the Department of Treasury, we inform you any U.S. federal tax advice contained in this document or video is not intended for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter that is contained in this document.

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Rich Smith

Rich Smith

Rich Smith, CPA, MBA, is a Partner at Bowers & Company CPAs PLLC. Reach him at 315-234-8132 or RPS@bcpllc.com. Bowers & Company aims to offer helpful information to our clients and friends. Learn more about how we can help should your business need accounting services.

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