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PPP Second Draw. It’s Coming…
January 8, 2021

Your Late Christmas Gift…

…better late than never for the Consolidated Appropriations Act, 2021.

 As was reported in last Tuesday’s mid-week newsletter, the Consolidated Appropriations Act, 2021 was sent to President Trump and he signed it yesterday.  While this was expected, the delay was not.  Nevertheless, the Bill is law and the $600/person (assuming you earned less than $75,000 in 2019) stimulus will be going out the first week of the year in waves just like last time, so tell your employees to be patient.  That is assuming you have employees sticking around after they learn they can collect up to $750/week in unemployment benefits, assuming they were making $22.50/hour.  If they were making $15/hour and you had to let them go, they will continue making $15/hour for the next 11 weeks by staying home so don’t expect them back soon. But I digress.

 So what does this mean to you?  If you read last week’s email, it is all old news, but just to keep things interesting, there are a few more items I will add.

 What we knew:

  • To be eligible for PPP2, you must be able to demonstrate a 25% or greater loss of revenue, in any one quarter when comparing 2020 to 2019

    • If you are in the entertainment/hospitality/food business, that’s pretty much a given.

  • Maximum PPP2 loan amounts will be $2 million

  • Maximum number of employees of 300

  • Maximum loan amount to be 2.5x monthly payroll EXCEPT:

    • Restaurants will be able to borrow 3.5x monthly revenue, at least the ones that are left.

  • For additional information, go to my last email here.

 There are other rules, but let’s not turn this into a Tolstoy novel.

 If you have an SBA loan right now:

  • You February and March payment will be made by the SBA* – now you have no reason for being skimpy this Valentine’s Day

    • *capped at $9000/month

  • Your SBA loan payments will be made through the end of September if you meet the following criteria:

    • You are a small business that has an SBA Micro Loan or Community Advantage Loan

    • You have an SBA 7a or 504 loan and are in the hardest hit industries, such as:

      • Food service, accommodations, arts, entertainment, education and a few others`

  • You may be able to refinance your variable rate 7a with a fixed rate 504 loans

  • You may be able to refinance a conventional loan

Prior to COVID, could you even pronounce EIDL (Idle)?  Free money is back.  Congress has re-appropriated the EIDL (Economic Injury Disaster Loan) $10,000 grants to new recipients but only if you are in a low-income census tract.  Call me crazy, but if you are an impacted business, doesn’t that make you the low-income portion of  that tract?  Again, I digress.

 Some things to consider…

  • When you borrow from the government, everyone knows

  • If you need a new PPP Loan, you MUST be able to show 25% decreased revenue in one of the quarters in 2020 when compared to the same quarter in 2019.

    • If you are unable to produce a quarterly financial statement, call your CPA, bookkeeper or me; I can help with that.

  • Interim Final Rules will be coming out by mid-January spelling out processes and procedures and again in February to clarify the previous Interim Final.

    • This may lead to Interim Final Final Rules or Final Interim Interim Rules, but never to a Final Rule.

 My best to you and yours for a wonderful 2021.  This time next week, hindsight will be 2020.


Credits to Frank Centofanti and Katey Proefke