Preparing for The Second Round of Paycheck Protection Program
The SBA is likely to open its portal to banks in the coming days, meaning your lenders may be ready to accept applications for the second round of Paycheck Protection Program (PPP2) funds in the near future. Here are a couple things to keep in mind as you prepare for a potential PPP2 application:
1) Start to pull together 2019 and 2020 calendar quarter financial information. A decrease of 25% of gross receipts from a quarter in 2020 to the corresponding quarter in 2019 is required for eligibility for PPP2.
2) Give consideration to the good faith certification regarding the necessity of a PPP2 draw. The general state of your business as well as liquidity are two common measures to determine need, but are by no means the only metrics.
3) If you meet the 25% decrease and the uncertainty certification, you should start to gather payroll data (including company-paid health insurance) for 2019 and 2020. You will want to use the higher year for the base for your payroll number in your PPP2 application.
a. If you are using the same lender for PPP2 as you did for the initial PPP loan last year, you may not need to re-submit payroll data
b. If you used a rolling 12 month calculation for the first PPP loan (i.e. 4/1/2019 to 3/31/2020), you may be able to use that data again or you may have to use 2019 calendar year.
Walz Group is willing and able to help you with your application. If you would like our assistance, please reach out to a team member that services your account. We will need the information in bullet-point 3 to assist with your application.
Thank you again for allowing us to serve you, and please don’t hesitate to reach out with any questions or concerns you have regarding PPP2.
Updated Paycheck Protection Program FAQ’s
Previously we shared a list of frequently asked questions around the Paycheck Protection Program. There have since been some additions, as of May 27, 2020.
Paycheck Protection Program Flexibility Act of 2020 Vlog
Walz Group CPA Principal Daniel T. Massey, CPA and Manager Benjamin J. Ritenour, CPA provide an update on the recently passed Paycheck Protection Program Flexibility Act, clarifications from...