As we’ve entered into the new year, Congress has passed another Paycheck Protection Program (PPP) round, offering millions of dollars to small businesses throughout the United States. Today we’re going to help you navigate this difficult time and offer you the easiest and fastest way to apply for a PPP loan in 2021.
What is a PPP Loan?
A PPP loan is designed to assist small businesses with loans to cover their operational costs and payroll. The new round of loans has been split into three categories, with the first draw PPP loans offering first-time loans for businesses who qualified previously under the CARES Act but haven’t yet received a loan. The second draw loans are for businesses who now need additional funding in addition to their original PPP loan, and return or missed funds are available for businesses who returned their first loan or didn’t receive everything they originally qualified for. These two-year, six-month deferment loans offer a 1% fixed-rate and are designed to assist small business owners in having a reserve account during the pandemic.
If you have a small business with under three-hundred employees and have used all of your first PPP loan, you will be able to apply for the second draw PPP loan.
Who is eligible for Second Draw PPP loans?
Additionally, you’ll need to show a twenty-five percent decrease in gross receipts during the first three quarters of 2020 compared to the previous year. If you are a reasonably new business, there is a separate timeline to assist with this, and current applications can also use the fourth quarter’s earnings to demonstrate a loss. There are restrictions on the type of business you own, and the terms appear to be very similar to that of the first round of assistance last year.
PPP Loan Application Process
This new program will have a simplified process for applications and a flexible covered period. Borrowers can choose to end the covered period between eight weeks and twenty-four weeks as they desire. If you are applying for a loan that is under $150,000, you’ll find that there’s a new one-page application form. This is still in the works but will make things much easier for small business owners that struggled during 2020 with the extensive application process and paperwork that was incredibly off-putting to many businesses.
To apply, the SBA has created a downloadable standard application form that you will need to fill out and, depending on the lender, you’ll need to provide specific documentation alongside it. Currently, the applications are primarily available through community lenders that work closely with small businesses. For assistance with your application, choose a company like Omnipayusa, who will be able to guide you through the process to make it quicker and easier for you to get your application accepted.
Updates to previous terms
The latest PPP funding offers more forgivable expenses than before, which is enticing more small business owners to take out a PPP loan. Operational expenditures, such as software and human resources, can be covered, as can any property damage costs. Supplier costs and worker protection costs are also included, allowing companies to invest in PPE to follow the COVID-19 guidelines in your state.
With the simplified application form and process, it’s well worth considering this round of funding if your small business is eligible. After confirming your eligibility, find a lender who can accept your application to complete your payment processing as quickly and smoothly as possible. If you need any assistance with your PPP loan application, Omnipayusa can help make the process simple and efficient for you, and their team will be able to help you with any concerns you may have.