A new coronavirus relief bill passed last month will provide $284 billion in Payroll Protection Program (PPP) loans for small businesses. The experts at Orlando based CPA Accounting & Tax Services shares important details about the new relief bill, outlining key items you need to know.
1. You have the same amount of time to use the funds: As with the last round, applicants have between 8 and 24 weeks to use the funds. At least 60 percent of the funds must go toward payroll and the rest toward eligible expenses like rent and utilities.
2. Loans are capped at a smaller amount: The new PPP loans are capped at $2 million (they were previously capped at $10 million in the first round).
3. The maximum number of employees has changed: The second round of PPP loans requires that applicants have no more than 300 employees. Previously companies were required to have no more than 500 employees.
4. You must show a drop in revenue: Unlike the first round of PPP loans, the second one requires a business to demonstrate at least a 25 percent drop in revenues from the fourth quarter of 2019 to the same period this year.
5. Additional “covered expenses” have been added: The new bill includes the addition of new covered expenses, including government mandated equipment for social distancing (i.e. plexiglass partitions and air filtration systems), remote working computing needs, etc.
6. You can take out a new loan, even of you received the previous one: For business owners meeting the aforementioned qualifications, you can apply for a second loan, known as a “second draw” loan. The application deadline is March 31.
Let us guide you through the PPP loan process. Contact the professionals at CPA Accounting & Tax Services to help guide you through tax season and beyond. We specialize in Business Accounting Services, Individual Tax Services, International Tax Services, Tax Planning and Tax Resolution Services. We have offices in Orlando, Florida and service clients worldwide. Find out how we can serve all of your accounting needs by contacting us today: www.cpaaccounting.biz