Is Your Business Eligible for the Second Round of PPP Loans?

Kirsch CPA Group

Jan 12, 2021

Deadline Coming: Follow Up on Your PPP Loans

The second round of PPP loans is approved. Banks will begin accepting applications for second-time borrowers on January 13, 2021. Is your business eligible?

Second-time PPP borrowers will apply using Form 2483-SD. To determine your eligibility, borrowers must meet the following minimum qualifications:

1. Applicant Meets Size Standard – If applying for a second PPP draw, loans are limited to businesses with 300 or fewer employees.

2. Borrower received a first PPP loan and has used (or will use) the full amount.

3. Borrowers must demonstrate a greater than 25% reduction in gross receipts:

The reduction can be in any quarter during 2020 compared to the same quarter in 2019.
Borrowers may demonstrate the 25% decline by comparing their gross receipts on an annual basis using the 2019 tax return compared to the 2020 tax return.
If the business was not in business in 2019 but was in business by February 15, 2020, then the business can compare Quarter 2, 3, or 4 of 2020 to Quarter 1 of 2020 to determine if the business qualifies.

4. Purpose of the Loan – Funds must be used for Payroll Costs, Rent, Utilities, Certain Mortgage Interest, and certain expanded covered expenses such as Operations Expenditures, Covered Property Damage, Covered Supplier Costs, or Covered Worker Protection Expenditures.

PPP borrowers may receive a loan amount of up to 2.5x their average monthly payroll costs in 2019, 2020, or the trailing 12 months prior to the date of the loan application. Loan amounts cannot exceed $2,000,000. Borrowers in the hotel and foodservice industry (NAICS code beginning with 72) are eligible for a loan of up to 3.5x their average monthly payroll costs.

Second Round PPP Loan Frequently asked questions:

What if my business doesn’t keep quarterly records?

You can qualify if you have an annual revenue decline for 2020 to 2019 of 25% or more. To demonstrate this, you need financials or your 2020 tax return.

What if I do not have my 2020 Tax Return Complete?

If the borrower’s loan is under $150,000, you do not have to submit proof of revenue decline with the initial application. You will have to submit it to SBA on or before you apply for forgiveness. As long as you are confident in total gross receipts, you can apply for a PPP loan prior to finalizing your 2020 return.

What if I am a schedule C filer?

Schedule C filers will need to apply based on the revenues of their 2020 tax return compared to 2019.

How do I apply for Round Two PPP Loan?

Send Form 2483-SD and proof of a decline in revenue to your lender.

I need help!

If you have any questions, wish to have Kirsch CPA Group assist you with the PPP process, or would like to discuss this information in more detail, please reach out to any member of the Kirsch Team at 513.858.6040.

Schedule a time to talk about your needs.

More Resources

Guide: Next Level Accounting Services for Your Growing Business

Guide: Build a Better Business by the Numbers

Case Study: Strategic Accounting Support from Acquisition to Sale

About The Author

Kirsch CPA Group is a full service CPA and business advisory firm helping businesses and organizations with accounting,…

info@kirschcpa.com

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