We are sure you have heard about the latest bill that passed Congress, hopefully from reading one of our newsletters. One of the programs that passed was a second round of PPP. The SBA is tentatively scheduled to issue guidance on this program by 1/7 with lenders starting to take applications sometime next week.
The application process will be almost identical to the first round. However, the premise of this round is targeted more towards businesses that saw more than 25% reduction in their gross receipts (not yet defined, but let’s assume income deposited during the quarter) in any one quarter when compared with the same quarter in 2019.
What should you do now? We are certain the SBA will provide more guidance but we want you to be prepared. So please take a look at your gross receipts in 1st Q 2020 compared to 1st Q 2019, 2nd Q 2020 compared to 2nd Q 2019, same with 3rd and 4th Q. If you did not see a drop of more than 25% in ANY of those quarters compared with 2019 then you don’t qualify, nothing to do. You only need to have the drop in one quarter when compared with the same prior year quarter. So, if 3rd Q saw a 25% reduction compared to 2019 but the other 3 quarters did not, you still qualify (assuming they don’t change the rules). If you did see a drop of more than 25% in any quarter we need to work with your lender and get prepared to submit an application (which also has not yet been finalized).
Please note that unlike the first round of PPP where the banks were expected to pay agent fees, our services will be billed to you at our usual rates. The good news is that accounting fees are included in the forgiveness of PPP funds!
Please let us know ASAP if you intend to apply so we are ready to go when the SBA light turns green.