Do I Qualify for PPP2?
Applications for PPP2 start to be accepted for all qualified applicants Wednesday, January 13, 2021. Here is how to determine if you qualify for PPP2:
- Have you had a 25% or more decline in 2020 Gross Receipts in any quarter compared to the same quarter in 2019? If yes, proceed. If no, stop – you don’t qualify for PPP2.
- Do you have less than 300 employees? If yes, proceed. If no, stop – you don’t qualify for PPP2.
- If you received PPP1, have you spent 100% of the PPP1 funds on qualifying expenses? If yes, proceed. If no, stop – you don’t qualify for PPP2.
- If you answered yes to all of the above, you are eligible to apply for the PPP2 forgivable loan. This will act as a second draw on your existing PPP loan.
Two FAQs that are already popping up are:
- How is the US Treasury is defining “Gross Receipts?” Here is how Gross Receipts is being defined:
The new guidance makes the definition consistent with the definition of receipts in 13 C.F.R. Section 121.104 of SBA’s size regulations. Specifically, the IFR defines Gross Receipts to include all revenue in whatever form received or accrued (in accordance with the entity’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. Forgiven first-draw PPP loans are not included in the 2020 gross receipts.
- What if my business is eligible for PPP2 but I’ve already applied for forgiveness on PPP1?
If you’ve already applied for forgiveness but the loan has not been canceled, please contact your lender and notify them that you want to apply for PPP2 and to put a hold on your application for forgiveness. If you have already received forgiveness on PPP1, please contact your lender and notify them you want to apply for PPP2
If you have any questions, please contact the Tembo Team, or review these links:
Journal of Accountancy Summary
US Treasury Interim Rule for PPP2
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Ben Platt
CEO and Founder
