PPP and 2021
Happy New Year and Welcome to 2021!! Is 2020 hindsight, or is hindsight 2020? Or should we just rip out the rear-view mirror and never look back?
The 117th Congress was sworn in yesterday and in a long standing tradition, no sooner were they sworn in, than onlookers returned the favor and swore back.
In all seriousness, given that last week was the ‘dead-week’ between Christmas and New Year’s, not a lot came out of Washington that impacted PPP2. However, some of the major banks have sent out notices to their customers stating that as soon as the application has been created, (which should happen by the end of the week – remember the 10 day mandate?) they will be participating in the program. The difference this time is it will almost be exclusively on-line via a portal, similar to the forgiveness applications, so if you are not comfortable scanning and uploading documents and creating pdf’s, find someone who is.
There was also a flurry of activity on YouTube regarding the PPP application form because the SBA decided to update the original loan form and post it on December 31st making a lot of folks think it was the new form. I’m not sure where they were going with that because it does not address any of the PPP2 criteria, such as 25% decrease in revenue, 300 employees and so forth. However, that did not stop some folks from posting, rather excitedly, that the new application was ready. It is NOT.
Some PPP Resolutions to make:
Ask for forgiveness... You will need to apply for forgiveness this year. If you got your PPP loan this last April, you will have to apply for forgiveness by July. If you got your loan last May, you will have to apply by August, and so on.
…but not too soon. If your PPP Loan was $150,000 or less, there will be a new loan forgiveness form specifically for you, so you will save time by waiting for the new form. Like your laundry detergent, it will be new and improved but will probably still not get all the stains out.
The EIDL grant will be opened back up so if you had idle hands last year and did not apply for the EIDL grant, tell your idle hands to complete the EIDL grant application – you can get $1000 for each person you employ up to $10,000.
New PPP money - $284 billion has been allocated this time around. In my opinion, this should be sufficient since over $124 billion was left on the table when the window closed in August and this time it will be going out to folks that must demonstrate the need. If you can show a reduction in revenue of 25% or more comparing 2019 to 2020 in any given quarter, you may qualify.
Keep an eye out for the employee retention tax credit good for up to $10,000 per employee, courtesy of Uncle Sam. This only works if you have wage and salary dollars above what you paid for with PPP. Talk to your CPA about this one.
As always, if you have any questions or need any assistance, I am available to help. I have already consulted on 24 forgiveness applications and have yet to have an application kicked back.
All the best in 2021!
