As part of the 2nd Coronavirus Stimulus Package, businesses can now take advantage of another round of PPP funding. If you previously received a PPP loan you can now apply for a 2nd one and if you didn’t take a first PPP loan, you can do that now as well.
Cross River Bank was a leader in getting PPP funding to small businesses last year, behind only Bank of America and JPMorgan Chase in total number of successful PPP loans, but those larger banks generally prioritized loans from larger businesses.
By filling out the pre-application you will assist in streamlining the PPP application process ahead of time. Cross River will email you when you can finish the application and you won’t have to re-enter the information you will provide now.
The federal government’s Paycheck Protection Program, or PPP, is designed to allow contractors, self-employed individuals, non-profits, and small businesses to get funding to keep people on payroll. With this round more businesses are eligible, including 501(c)(6)s, destination marketing organizations (DMOs), housing cooperatives, newspapers, broadcasters, and radio stations.
First time borrowers had to be in business since 2/15/20 to be eligible and can have up to 500 employees.
Second time borrowers must have used the full amount of their first PPP loan, have up to 300 employees, and had experienced a 25% drop in revenue in any quarter of 2020 as compared to the same quarter in 2019.
There is no revenue drop requirement if you are taking your first PPP funding now.
You can receive a loan up to 2.5 times the average monthly pay of yourself and your employees, capped at $20,833 in funding per employee. Accommodation and food establishments can take a forgivable loan of 3.5 times monthly payroll, capped at $29,167 in funding per employee. The maximum loan size of $2 million.
PPP qualified expenses for loan forgiveness:
If you spend the loan on qualified expenses it can be forgiven. The definition of qualified expenses as been expanded for both first and 2nd time borrowers. Previously you were able to use PPP funds for payroll, rent, utilities, and mortgage payments. You can now also have your loan forgiven for software, cloud computing, and other human resources and accounting needs, property damage costs due to public disturbances that occurred during 2020 that are not covered by insurance, covered supplier costs for goods essential to operations, covered worker protection expenditures, and personal protective equipment (PPE).
You need to spend at least 60% of the loan on payroll in order to qualify for full loan forgiveness. You can use the proceeds from the loan over 24 weeks.
If you borrow under $150,000, your loan can be forgiven using a simple 1 page form.
If you receive forgiveness on a PPP loan, you can still deduct the expenses paid with that loan! Plus, you no longer have to deduct EIDL grants from PPP forgiveness.
Will you start your pre-application now for another round of PPP funding?
Disclaimer: Please note the information on this page is subject to change pursuant to guidance from the US Small Business Administration. Eligibility and availability are determined on a case-by-case basis by the lender and subject to guidance published by the SBA.