Possible PPP Required Documentation to Apply for a PPP Loan in 2021

Important Date

This current round of PPP funding extends through May 31, 2021, or until the funding is exhausted.

Details regarding PPP second round funding

A second wave of stimulus is on its way into the US economy and the Paycheck Protection Program for small businesses is on the forefront of this important legislation. On December 21, Congress passed a $900 billion Covid-19 relief bill and the president signed the bill into law on December 27.

A PPP loan is designed to provide a direct incentive for small businesses to keep their workers on the payroll. PPP loans are eligible for full or partial forgiveness if the money is used for qualifying costs including payroll, rent, mortgage interest, or utilities.

Under the renewed program, the list of expenses eligible for forgiveness has been expanded to include four new categories:

• Costs for personal protective equipment and more that help a PPP loan recipient comply with federal and/or health and safety guidelines related to COVID-19
• Software, cloud computing, human resources, and accounting needs
• Any spending not covered by insurance that is related to property damage due to public disturbances that occurred during 2020.
• Spending on supply costs essential to the business operations at the time the expense occurred. For instance, restaurants’ purchases of perishable goods can now qualify.

Who is eligible for a second PPP Loan

Learn more about the guidelines for small businesses as they stand to date:

• Have 300 or fewer employees.
• Have less than the revenue threshold specified in section 121.201 of Title 13, Code of Federal Regulations (sometimes as low as $1,000,000 but often quite a bit more) or a size that falls under the alternative size standard established under Section 632(a)(5), which is a tangible net worth of the applicant of not more than $15,000,000 or average net income for federal tax purposes of not more than $5,000,000 excluding carry-over losses.
• Be a private and not public entity.

If your business falls into one of the “typically ineligible” categories, but the PPP laws or rules have already allowed you to get a first PPP loan, you may be eligible for a second PPP loan.

For a second PPP loan, the revenue drop needs to be at least 25% from the year before. The difference for new businesses is in the quarters they use to demonstrate the loss.

• Except as provided below, had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter in 2020, that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the same quarter in 2019
• If the entity was not in business during the first or second quarter of 2019, but was in business during the third and fourth quarter of 2019, had gross receipts during the first, second, or third quarter of 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the third or fourth quarter of 2019

Excluded categories include:

• An entity organized for research or for engaging in advocacy in areas such as public policy or political strategy or that otherwise describes itself as a think tank in any public documents.
• Any business concern or entity primarily engaged in political or lobbying activities.
• Any entities affiliated with entities in the People’s Republic of China, the Special Administrative Region of Hong Kong, or that retains as a member of the board of directors a person who is a resident of the People’s Republic of China.