It’s hard to believe that one year ago the SBA PPP program did not exist. Now it is a prominent part of our business vocabulary. Your trusted advisors at Eaton, Babb & Smith have spent countless hours studying the legislation that brought it into being and the interim final rules that have changed it multiple times. It has provided a lifeline for businesses that continue to be impacted by the COVID-19 pandemic in the United States.
PPP Eligibility Changes
The first round of PPP ended on August 8, 2020, but a second round was reopened on December 27, 2020 and remains open until March 31, 2021 or until funds are gone. Qualifications for eligibility changed that could significantly impact the decision for businesses that need financial help. For example, farmers are now allowed to borrow against their gross income instead of their net income, and this has allowed access to PPP funds for many who were not able to borrow money in the first round.
PPP Qualifications Overview
To qualify for the second PPP loan, you must be able to show a 25% decrease in gross receipts for 2020 when comparing to 2019 or for any calendar quarter in 2020 when compared to 2019. Each situation is unique, and the CPAs at Eaton, Babb & Smith can help you arrive at a wise decision.
If you have been impacted by COVID-19, let us help you evaluate your 2020 financial data and work with you to make a well-informed decision about applying for PPP.