Times have been tough on everyone, but small businesses have taken a brutal hit from COVID-19 pandemic. However, the CARES Act created the Paycheck Protection Program (PPP) to provide aid for small businesses. First started in 2020, the PPP reopened the week of January 11, 2021 and will remain open until March 31, 2021. Not only are small businesses able to apply for a First Draw PPP Loan, but the program now offers a Second Draw PPP Loan for eligible borrowers that previously received a First Draw PPP Loan.
According to the U.S. Small Business Administration (SBA), any small business concern that meets the SBA’s size standards can qualify for a First Draw PPP Loan. This includes sole proprietors, independent contractors, and self-employed persons. If any businesses, 501 (c)(3) non-profit organizations, 501 (c)(19) veteran organizations, and tribal businesses with more than 500 employees meet the SBA industry standard, they may be eligible for the loan. Businesses that have already received a First Draw PPP Loan may qualify for a Second Draw PPP Loan if they will or had used the full amount for authorized purposes. They must also demonstrate a 25% reduction in gross receipts between comparable quarters in 2019 and 2020; and have no more than 300 employees.
All businesses should be aware of the Second Draw PPP Loans and the reopening for First Draw Loans. If you want more information about PPP loans, please contact Lakeesha Browne, CPA. This information was brought to you by the U.S. Small Business Administration.
“Paycheck Protection Program.” United States Small Business Administration, Jan. 2021,
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
Accessed 25 Jan. 2021.
