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Last week, the second iteration of the Paycheck Protection Program (PPP2) saw major movement in everything from guidance to the official application form. Keeping up with the many developments regarding the PPP2 and its applications, guidance and ambiguities is almost a full-time job in and of itself. To ensure your clients are sitting on go and ready for lift off, the MICPA has been watching these matters closely and we’ve got the rundown on everything you need to know about the PPP2 as of today, January 12, 2021.

• Opening bell on the PPP2 application was Monday, January 11, 2021 for first time borrowers only.
• Those that received funding from the first PPP may apply for additional assistance on Wednesday, January 13, 2021.
• Additionally, only community financial institutions will be able to make First and Second Draw PPP loans during the first few days of application with access opening to all participating lenders thereafter (no date has been specified at the time of this article’s publication).
• Applications for the PPP2 will close on March 31, 2021.
• The official forms for application were released Friday, January 8, 2021. One for first time borrowers under the updated PPP and a second for eligible Second Draw applicants.
• The U.S. Small Business Administration (SBA) published new guidance for accessing resources for minority, underserved, veteran and women-owned businesses, the final interim rule on PPP as amended by the Economic Aid Act and the interim final rule regarding Second Draw PPP loans.

According to a joint press release with the U.S. Department of Treasury, the SBA also announced the following updates to the PPP which, according to SBA Administrator Jovita Carranza, “…builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.”

These updates include:

• “PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
• PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
• The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations;
• The PPP provides greater flexibility for seasonal employees;
• Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
• Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

• Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
• Has no more than 300 employees; and
• Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020₁.”

As for forgiveness, Market Watch reports that at least 60% of the entire second-draw loan must be applied to payroll expenses to qualify for full loan forgiveness. Business owners borrowing up to $150,000 may submit a one-page certification that includes the number of employees retained by loan funds, an estimated amount of funds spend on payroll, the total loan amount and proof of qualifying revenue loss if not already supplied to their lender.

Those borrowing more than $150,000 need to complete the same process of forgiveness under the original PPP loan. Documenting how the money was spent will be necessary, and financial advisors should begin gathering that information as soon as possible. These details include payroll expenses and head count, operating costs, supplier costs and other covered expenses₂.

The MICPA will continue to track new developments regarding the PPP as well as other resources for small business, including the Economic Injury Disaster Loan (EIDL), addressed in the Economic Aid Act, the SBA shorthand for the Supplemental Appropriations Act of 2021. As time to prepare dwindles, financial advisors and CFOs might consider employing the CPA Business Funding Portal launched by the AICPA and biz2credit at the end of 2020. For those unfamiliar, the portal streamlines application using the following features:

• One place for all your clients’ funding applications
• Ability to manage funding application across your firm
• User role management which allows easy collaboration with colleagues
• An automated funding application, complete within 4 minutes
• Seamless integrations that save time
• PPP loan forgiveness application
• Ability to earn agent fees or commission on funded applications

For those feeling the crunch, the CPA Business Funding Portal could prove an invaluable, affordable solution to ensuring your clients or firm is covered on launch.

1. “SBA and Treasury Announce PPP Re-Opening; Issue New Guidance.” U.S. Department of Treasury. 8 Jan. 2021. Accessed on 11 Jan. 2021.
2. Sheehy, Kelsey. “How to Apply for the Second Round of PPP Loans for Small Businesses.” Market Watch. 11 Jan. 2021. Accessed on 11 Jan. 2021.