Most banks will be opening their portals to accept the second round of PPP applications early next week. If you are planning on applying, please make sure you have contacted your banker to find out their application process and documentation requirements. The deadline to apply is 3/31/21.
Based on the amount of money Congress has allocated to PPP Round 2 and the likelihood that fewer applicants will be eligible compared to Round 1, we believe the money will not run out as quickly as it did during the first round of funding. This means you do not need to rush out and apply on the first day your bank accepts applications. Instead, we recommend that you are ready to apply the first week your bank opens for applications.
To prepare for Round 2, we recommend you review the following:
- Determine if you are eligible to apply for the second round of funding by reviewing the eligibility requirements. You can review the requirements in the blog we sent on 1/7/2021: https://www.fluenceportland.com/budgeting/sba-ppp-loan-part-ii-you-may-be-eligible
- Get a copy of your original Round 1 PPP loan application and back up documents. The calculation for Round 2 is the same calculation as for Round 1. You have the option in Round 2 to use either 2019 or 2020 payroll costs. Since payroll costs in 2019 will be higher than 2020 due to the shut down in the spring of 2020, 2019 information is what we recommend you use. Your original PPP loan application used payroll costs from 2019, which means a new calculation is not needed. This simplifies what the bank needs, also. In addition, it means you may receive a similar amount of funding in Round 2 as you did in Round 1.
- If your original Round 1 PPP loan was over $150,000, you will need to provide the bank documentation to support the revenue reduction of more than 25% when you apply. You will simply provide the bank with a comparative profit and loss statement (comparing the second quarter of 2020 to 2019, for example) for the quarter that meets the 25% requirement. If you need help with this, please let us know. If your original Round 1 PPP loan was under $150,000, this documentation is not required until you apply for forgiveness unless the bank requests it with the loan application.
- We recommend that you watch a short, twenty-two-minute video put on by our ADCPA colleagues at Rosen & Associates that will go over the new Round 2 application format. They do a great job stepping through the new application. Each bank will have their own online version of the application, but the questions should be similar, and Mark and Jeff at Rosen & Associates do a great job of walking through the application. Here is the link for the video:
- Please remember to be patient with the process and your bank. Like we mentioned in the beginning, there appears to be enough allocated to PPP Round 2 that the money will not run out in days like it did during PPP Round 1.
We are here to help and will continue to keep you updated as things develop. Please stay safe and healthy!