|Borrowers may be eligible for Paycheck Protection Program (PPP) loan forgiveness|
If you received the Payroll Protection Loan (PPP) make sure you are taking the necessary steps to apply for loan forgiveness.
A borrower can apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been used. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.
You can find more information on the SBA Website.
Were you a sole proprietor, LLC or independent contractor that was not able to participate in the Paycheck Protection Program because you did not have a significant profit from your business? If so, you might have the opportunity to access up to around $20,000 in PPP grant (forgiveness) money (up to about $30,000 if you run a restaurant). But you may only have days to apply for these funds.
The SBA has just released a new PPP forgiveness formula that uses revenue reported on your 2019 or 2020 Schedule C (line 7) rather than net profit (line 31). In a nutshell, you can now count your revenue as the basis for forgiveness just like employee wages (to a maximum of $100,000/yr). Engage your accountant in the details.
Please review the scenarios in the attached PDF “Revenue-Based PPP Formula” to see how this works in practice.
The new PPP application form and SBA FAQ document is also attached for your review. There are other program requirements of PPP that still apply such as:
- having been in operation on February 15, 2020
- documentation of income using tax statements
- if you use revenue of more than $150,000 as your loan basis you will need to certify to the SBA that “Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant”.
Businesses that are taxed by the IRS as C-Corporations, S-Corporations and Partnerships are not eligible to use the gross income calculation method for calculation the PPP loan amount. Only businesses that use Schedule C to report their income and expenses to the IRS are eligible.
It appears that these new rules are not retroactive – if you have already received a 2nd round PPP loan you cannot resubmit under these rules. These rules should be available for anyone who has not gotten a PPP loan, or has only gotten a 1st round loan.
If you are interested, you should apply as soon as possible. The special small business-only application period expires next Tuesday (March 9th) and the overall deadline for applications is March 31, 2021. The new stimulus bill going through congress does not significantly increase PPP funding, except for a new program for restaurants.
Since this form was only published on March 3 the banks – where you apply – may not have updated their systems. Applying could be a chaotic experience and you will want to research multiple options. You may want to try and reach a customer service representative on the bank’s PPP program. It is possible that some of the “FinTech” funders like Biz2Credit and Bluevine might be faster off the mark than local banks.
To move forward, download these PDF files…
Steps to Promote Equitable Relief for Mom-and-Pop Businesses
Building on a month of strong results, the Biden-Harris Administration and the U.S. Small Business Administration are taking steps with the Paycheck Protection Program to further promote equitable relief for America’s mom-and-pop businesses.
The latest round of Paycheck Protection Program funding opened one month ago and already the Biden Administration has succeeded in making major improvements to the program’s implementation:
- For businesses with fewer than ten employees, the share of funding is up nearly 60%
- For businesses in rural communities, the share of funding is up nearly 30%
- The share of funding distributed through Community Development Financial Institutions and Minority Depository Institutions is up more than 40%
It’s official! The much-rumored, oft-mentioned COBI small business grants are now coming soon.
Get ready – applications for business assistance grants will become available in association with KEDA (the Kitsap Economic Development Alliance) starting on Friday, March 12.
Businesses may receive between $5,000 and $10,000 based upon their COVID-19 financial impacts and the number of total applications received by the City.
The unanimously-approved Business Recovery grant program will provide $210,000 to support Bainbridge Island businesses recovering from the COVID-19 pandemic. Continue reading
Kitsap Bank’s edg3 FUND is back and better than ever with more prizes and additional benefits!
This small business competition is for entrepreneurs dedicated to growing their community
economically, socially and environmentally. And in 2020, the competition will also recognize small
businesses that have demonstrated innovation and resiliency during the COVID-19 pandemic.
- $25,000 edg3 FUND Grand Prize Winner
- $10,000 Innovation Award
- $5,000 #causegood Community edg3 Award
- $5,000 Public Favorite Award
2020 edg3 FUND Timeline –
- Nomination Period: August 3 – 31
- Application Period: August 15 – September 15
- Finalists Announced: October 1
- Finalist Pitches/Interviews: October 2 – 23
- Public Vote: October 26 – November 6
- Winners Announced: November 20
Please note, this is not a needs-based competition; recipients are selected based upon how well they meet the competition criteria. Must be a for-profit business based in Western Washington. All businesses must comply with federal and state laws. Entities that are tax-exempt organizations, non-profits, or charitable trusts are not eligible to participate. Businesses may self-nominate.
SBA and Treasury Announce New EZ & Revised Full Forgiveness Applications for the Paycheck Protection Program
Today, the U.S. Small Business Administration, in consultation with the Department of the Treasury, posted a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness applicationimplementing the PPP Flexibility Act of 2020, signed into law by President Trump on June 5, 2020. In addition to revising the full forgiveness application, SBA also published a new EZ version of the forgiveness application that applies to borrowers that:
- Are self-employed and have no employees; OR
- Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; OR
- Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.
The EZ application requires fewer calculations and less documentation for eligible borrowers. Details regarding the applicability of these provisions are available in the instructions to the new EZ application form.
Keep an eye on the Kitsap Economic Development Alliance blog for breaking news about changes in COVID recovery programs.
- SBA Finally Clarifies PPP Loan Forgiveness Rules: Full Forgiveness For Self-Employed Borrowers
- SBA and Treasury Announce New EZ and Revised Full Forgiveness Applications for the Paycheck Protection Program
- SBA’s Economic Injury Disaster Loans and Advance Program Reopened to All Eligible Small Businesses and Non-Profits Impacted by COVID-19 Pandemic
by Kelly Deis of SoundPoint Consulting
- a Fortune 500 company in business for 35 years with revenues locked in for the next 5 years
- a start-up with an untested management team, dubious business plan and volatile revenue stream
If you’re starting or growing your small business, you should learn about loans guaranteed by the U.S. Small Business Administration (SBA) as a funding option.
If you apply for an SBA loan, your loan won’t be from the SBA, and you won’t make your payments to the agency. Instead, the SBA approves lenders to provide loans to small businesses under their loan programs. Continue reading