PPP Round 2 - Frequently Asked Questions
By now Does my Round 1 PPP loan have to be already forgiven to qualify?
No. However, you must have used or plan to use all Round 1 funds by the time you apply
for Round 2.
What is the application deadline?
March 31, 2021.
Is PPP Round 2 forgivable?
Yes, and you can write-off the expenses paid with PPP Round 2 funds.
Do I have to use the same lender as before?
No. But it may be simpler as your lender already has your information needed to apply
for Round 2.
I did not apply for PPP Round 1. Can I apply for Round 2?
Yes. The application directs first time borrowers to use the rules and instructions in effect in Round 1. HINT: there is no revenue test to qualify if you are a first-time applicant.
Can I still apply if I returned my Round 1 funding?
Yes. If a borrower returned part of a PPP loan or did not accept the full amount of the loan proceeds it was previously approved for, the borrower may apply for an increase to its existing loan for the difference between the amount retained and the amounts previously approved.
I did not qualify for Round 1. Am I eligible for Round 2?
Probably not. Unless an exception applies, the rules in place for both are generally the same.
Is the funding available to the same groups as Round 1?
Yes. Self-employed, independent contractors, sole proprietors, partnerships and incorporated small businesses are all eligible for Round 2. Plus, several more were added such as chambers of commerce, trade associations and real estate boards.
What if I started my business in 2020?
You must have been in business by February 15, 2020 to be eligible.
What if I opened my business in 2020 and before February 15?
Compare your gross receipts in Q1 to each of the succeeding quarters of 2020 to determine
if a 25% drop.
What if I was in business for all or part of 2020 but now permanently closed?
You must be in operation at the time of loan application to be eligible.
What if I temporarily closed my business during 2020 but re-opened?
You can apply and will likely use the same revenue comparisons as a “seasonal” business.
Who is excluded?
Companies with more than 300 employees do not qualify. The limit was 500 employees
in Round 1.
How is gross revenue defined for 25% test?
The qualifier for PPP Round #2 is a 25% or more revenue decrease on either an annual basis from 2019 to 2020, or quarter-to-quarter from 2019 to 2020. The SBA defines revenue as “receipts in whatever form received or accrued by the borrower from whatever source, including from the sales of products, interest, dividends, fees, commissions, etc.”
Does my Round 1 PPP funding count as revenue for the 25% test?
No. Proceeds received from the initial first PPP loan are excluded from the calculation of gross receipts as are, apparently, capital gains and losses.
For additional information, please contact us at research@nwyc.com
