In addition, at least $40 billion has been set aside for businesses with ten or fewer employees and for loans under $250,000 in low-income areas.
The basic criteria to apply are as follows: (i) have used or will use the full amount of your first PPP loan, (ii) only businesses with 300 employees or fewer (loans are capped at $2 million whereas during the first round, businesses with fewer than 500 employees could receive as much as $10 million), (iii) borrowers need to prove that they saw a 25% reduction in gross receipts during a quarter in 2020 compared with the same quarter in 2019, and (iv) the business has not permanently closed. Businesses that have temporarily closed or suspended operations can receive a second-draw loan.
In addition, restaurants, hotels, and other accommodation and food service industry businesses can borrow up to 3.5 times their average monthly payroll costs up to the capped amount of two million.
As was the case with the First PPP, the Second PPP funds are also forgivable so long as the funds are on used to cover the following costs:
• Payroll (At least 60% of the total loan amount must be used on payroll expenses to qualify for full loan forgiveness.), paid sick leave, group insurance benefits paid by employer.
• Operating costs.
• Property damage sustained during protests and disturbances in 2020 if not covered under insurance.
• Payments to a supplier covering contracts and purchase orders in effect before taking out the second-draw loan.
• PPE expense and changes made to the business to meet new health and safety requirements.
If you have any questions or would like to discuss the 2nd Paycheck Protection Program further and discuss whether your business should take advantage of this vital resource, please reach out to one of our corporate lawyers at Antheil Maslow & MacMinn, LLP.