The maximum funding amount for the SBA Express loan which offers a faster turnaround time than standard 7 (a) loans has also been permanently set at $500,000, up from its pre-pandemic. Note: On January 19, the PPP was opened to all lenders. Unlike the PPP loans, which can be forgiven for eligible borrowers, these loans must be repaid within 30. Across both 2020 and 2021, PPP borrowers got all or nearly all of their loans forgiven, with PPP borrowers under $50,000 getting on average 98.6% of their loans forgiven, while those with loans of $2 million or more getting 99.4% of their loans forgiven. Hospitality or food service businesses with a NAICS code beginning in 72 may receive up to 3.5 times their average monthly payroll costs. So far, about $73 billion worth of loans have been approved in the second . The program was expanded in president Joe Bidens American Rescue Plan. Maximum loans of $10 million were available to first-draw borrowers, and loans up to $2 million were offered to second-draw, small business owners. During round 1 of the paycheck protection program, Lufkin Endodontics, Pa requested a PPP loan for $156,400.00. COVID-19 Resources. "SBA Re-Opening Paycheck Protection Program to Small Lenders on Friday, January 15 and All Lenders on Tuesday, January 19.". Your covered period which is when you must spend at least 60% of your funds on payroll can be between eight and 24 weeks after your loan originates. Paige Smith is a content marketing writer who specializes in writing about the intersection of business, finance, and tech. Everything you need to know about SBA 7(a) loans, all in one convenient location. Borrowers of loans up to $150,000 will submit a streamlined 1-page PPP loan forgiveness application, known as the PPP Loan Forgiveness Form 3508S. If borrowers have not applied 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. Loans were 100% guaranteed by the government. You can borrow up to $5 million at both fixed and variable interest rates as long as you have fewer than 500 employees and less than $7.5 million in average annual receipts. If you werent in business during Q1, Q2, or Q3 of 2019, but were in business during Q4, you can compare any quarter in 2020 with Q4 of 2019 to determine where your gross receipts dropped by at least 25%. They do not purport to reflect the views or opinions of Funding Circle. Under the stimulus relief bill, parents who make under $75,000 a year and have a child under 6 years of age will receive $3,600 through the child tax credit. This article was originally published onAllBusiness. The main takeaway is that any business that did not receive a PPP loan previously, or those businesses that experienced a 25% reduction in revenue in one quarter of 2020 over 2019, can apply for this new round of PPP. We will make changes here as they become law. At Funding Circle, were here for small businesses like yours, especially during this confusing, chaotic time. While businesses can apply for PPP loan forgiveness, the program for new loans closed at the end of May. Still, other programs are available to help your business recoup revenue lost during the COVID-19 pandemic. Yes! While it took Congress nine months to pass this new legislation and President Trump over a week to sign it, the new measure does provide many fixes to PPP and opportunities for new funding at a time when economic uncertainty still looms. The offers that appear in this table are from partnerships from which Investopedia receives compensation. However, because the COVID-19 pandemic is still raging, there could be another push for funding for large and small businesses. Over the three rounds of PPP loans issued between 2020 and 2021, the SBA disbursed $790,765,202,677 in funding. Restaurants, bars, and other qualifying businesses can receive funding equal to their pandemic-related lost revenue up to $10 million per business or $5 million per location. An additional $1 billion was allocated for these individuals in low-and moderate-income (LMI) areas. Employee Retention Credit (ERC) now available for all of 2021, and PPP loan recipients can claim ERCs. While it was clear that a forgiven PPP loan would not be considered income, Treasury guidance did not permit normally deductible expenses paid for by PPP funds to be deductible. This guidance outlined the following set-asides for these businesses: The guidance outlines that the SBA will only accept loan applications from community financial institutions for at least two days after the loan portal reopens, and that it will engage in community and public outreach along with a media campaign to promote the program and encourage these groups to apply. This comes as only about half of the $800 billion in so-called PPP distributed amid the pandemic has been forgiven so far. If your business needs funding right now, remember to research lenders before giving out any personal information. For loans of up to $150,000 you can simply certify your revenue loss when you apply, but on or before you apply for forgiveness you will have to produce documentation of that revenue loss. "H.R.1799 - PPP Extension Act of 2021: Summary. $15 billion for lending by insured depository institutions, $35 billion for new first-draw PPP borrowers, $15 billion and $25 billion for first-draw and second-draw PPP loans for borrowers with 10 employees or fewer, or for loans of less than $250,000 to borrowers in low-or moderate-income neighborhoods. While certain loans are now eligible for the EZ loan forgiveness application, there's greater interest in easing . Second-draw loans of up to $2 million were available for businesses that had used funds in their Round 1 or Round 2 loans. / CBS News. Proper Treatment of Improperly Forgiven PPP Loans. SVOG grants equal to 45 percent of a businesss gross earned revenue, up to a maximum of $10 million, are available for eligible applicants. The new $900 billion coronavirus relief bill includes $284 billion in PPP funds, along with provisions to help minority-owned businesses get loans . But it still hasn't received 3.2 million applications out of the 5.3 million loans disbursed in . The PPP Extension Act of 2021 is a new piece of legislation passed by Congress and signed into law by President Biden that extended the deadline for PPP loan applications from March 31, 2021, to May 31, 2021. These borrowers of less than $150,000, however, have to document the reduction in revenue upon applying for forgiveness. This program allows employers to deduct up to $14,000 per employee on tax withholdings. The new law also carved out additional benefits for restaurants, hotels, and other businesses under the NAICS Code 72. Any PPP loans that were issued in 2020 and 2021 were required to be repaid, unless you qualified to have yours forgiven. After round two loans ended in August of 2020, the CAA authorized the third round of PPP loans. Unlike the first round of PPP, however, while the method of calculating the new loans is the same, the new loans are capped at $2 million. No. Over the three rounds of PPP loans issued between 2020 and 2021, the SBA disbursed $790,765,202,677 in funding. of approximately $8.2 million under round two of the PPP. The direct portal, which will open for applications starting August 4, will be available for businesses that had PPP loans of $150,000 or less. The new legislation also streamlines the forgiveness application for loans of $150,000 or less. All SBA 7(a) lenders were approved to accept first and second draw applications starting on Tues., Jan. 19, 2021. To be forgiven, you must spend the remainder of your funds before September 30, 2021. The Board's rule extension will allow those individuals to apply for PPP loans, consistent with SBA's rules and restrictions. The New York Times. The loans are 100% guaranteed by the federal government; The interest rate will be 100 basis points or 1%, calculated on a non-compounding, non-adjustable basis; Loans will be processed by authorized lenders who will be permitted to rely on certifications of the borrowers to determine the borrowers eligibility and use of the loan proceeds. The tax credit is available in Q1 and Q2 of 2021 and is both refundable, meaning the IRS will send employers checks, and advanceable, meaning employers can apply for the credit in advance of paying their employees. There is an additional reduction calculation if you bring back workers but reduce their pay from the pre . Between 2020 and 2021, it has provided more than 11.7 million loans totaling nearly $798 billion to help hard hit businesses. If your business was operating by February 15, 2020, but hasnt been operating for a full 12 months yet, you can figure out your average monthly payroll costs by examining payroll from the months you have been operating. That was followed by first- and second-draw loans from small lenders with less than $1 billion in assets on Fri., Jan. 15, 2021. Investopedia does not include all offers available in the marketplace. This criticism, harsh at times, was thatsmall businessof less than 10 employees, women- and minority-owned businesses, and those in economically disadvantaged areas, were shut out of the program while large businesses, chains, and publicly traded companies received funding. Up to 40% of your remaining funds can go toward rent, mortgage interest payments, utilities, and other covered costs, including operations expenditures, worker protection expenses, property damage costs, and supplier payments. Funds can also be used to pay interest on mortgages, rent, and utilities. Neil Hare is an attorney and President of Global Vision Communications, where he specializes in small business policy, advocacy, and communications campaigns; follow him on Twitter @nehare and on LinkedIn. Student loan forgiveness is a release from having to repay the borrowed sum, in full or in part. You need to have proof you spent your funds correctly in case you get audited. That represents 30% of loans $150,000 or less that have not yet submitted for forgiveness, the SBA said. You also have to be a for-profit business based in the United States and not be delinquent on any debt owed to the government. Passage of the PPP Flexibility Act of 2020 relaxed many PPP loan guidelines. New first- and second-draw loans followed a pattern similar to that followed with previous PPP loans. Business owners could download and fill out the loan application from the SBA website. 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