Many businesses are wondering what exactly they need to compile to apply for Paycheck Protection Program funding. Below we dig into what may be needed from applicants.
This current round of PPP funding extends through May 31, 2021, or until the funding is exhausted.
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:
Learn more about the guidelines for small businesses as they stand to date:
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.
Excluded categories include:
Here is a list of documents for you to organize and digitize. As the final requirements have not been put into place by the SBA, this might not be a comprehensive list. Make sure to consult the SBA website for final guidelines.
When you apply for PPP funding through SmartBiz Loans, our streamlined process can help you determine the documentation that is relevant to your business type and type of PPP application.
In the SmartBiz online application, you will be able to choose which payroll documents to use to help determine the PPP loan amount you're eligible for. There are 2 primary options:
One of the following valid and unexpired must be provided:
Depending on the lender that funds your PPP loan, you might need to provide a voided business check that shows the routing and account number.
If you work with a payroll processor like ADP or Gusto, most have programs in place to help you calculate costs needed to apply for PPP funding. For more information, review the following payroll processing companies and how they are helping customers calculate payroll costs: Payroll Processors Who Can Help with Payroll Costs.
Depending on what type of documentation you choose for payroll, you may need to provide your 2019 or 2020 business tax return.
If you operate an affiliate owned business, additional documentation may be requested on a revenue drop potentially during 2019 and 2020. Additionally, a profit and loss statement on quarterly basis, yet to be confirmed by SBA, may be required only for loans that are greater than $150,000.
For information on calculating a profit and loss statement, visit the SmartBiz Small Business Blog: Business Profit And Loss: Tips To Prepare Your Statement.
Let SmartBiz help you get ready for the new round of the Paycheck Protection Program (PPP) approved by Congress*. While the SBA prepares to accept applications, we’ve put together a Prep List to help you identify of the relevant documents for your PPP loan application. Download the Prep List and we’ll alert you when it’s time to begin your PPP loan application with us. As the final requirements have not been put into place by the SBA, this might not be a comprehensive list. Make sure to consult the SBA website for final guidelines.
SmartBiz works with small business owners like you every day to help you apply for the funding you need. Since 2013, we’ve specialized in SBA (Small Business Administration) loans. The new round of the Paycheck Protection Program, to be administered by the SBA, provides continued financial support to help eligible small businesses keep their employees and stay open safely during the COVID-19 pandemic.
*The availability of PPP loans remains subject to SBA guidance and other factors, including the amount of funding available to banks and the quantity of eligible applicants considered on a first-come, first-served basis. The information provided above is for educational purposes only. Please consult the SBA’s website for actual rules and the most current guidance.