Paycheck Protection Program (PPP)

ISA will provide updated links to the latest information as it becomes available. This resource does not constitute legal advice. Companies should consult with their own legal counsel before determining how best to operate their business pursuant to federal, state and local orders affecting businesses.

Paycheck Protection Program (PPP)

In early January, 2021, the Small Business Administration reopened the Paycheck Protection Program and made important changes to the existing PPP loans.

Key Documents Needed:

Form 2483 – First Draw Borrower Application (Updated 1/8/21)
Form 2483-SD – Second Draw Borrower Application (Released 1/8/21)
Accessing Capital for Minority Underserved, Veteran and Women-Owned Business Concerns Guidance (Released 1/6/21)
Top-Line Overview of First Draw PPP Loans (Released 1/8/21)
Top-Line Overview of Second Draw PPP Loans (Released 1/8/21)

SBA Guidance (January 2021)

Information about New PPP Loans (January 2021)
This is an overview; seek more detailed information on each of these points.

If you never received a PPP loan:

First time applicants can apply through March 31, or until the new funding is exhausted.
Those who took advantage of the Employee Retention Credit may now pursue a PPP loan.
Group insurance payments can be included in payroll costs.
Seasonal employers have a greater flexibility in picking the 12-week period to determine payroll costs and maximum loan amount.

If you exhausted your original PPP loan:

A second-draw PPP loan is available for those who have fewer than 300 employees and experienced a greater than 25% reduction in gross receipts during one quarter of 2020 compared to the same quarter in 2019.
The loan amount is 2.5 times the average monthly payroll costs for the 12 months prior to the loan.
Loans may not exceed $2 million.
The loan may be forgiven if at least 60% of the loan is used for payroll.

Key changes to existing loans:

Provides that expenses paid for with PPP loans are deductible for tax purposes. (This applies to past and future loans.)
Expanded the type of expense available for forgiveness to include operations expenses, supplier costs, worker protection expenses (for equipment like PPE) and property damage incurred in public disturbances in 2020 that are not covered by insurance. NOTE: The requirement that at least 60% of the loan is for payroll costs remains intact.
The Economic Injury Disaster Loan grant no longer reduces the amount of the PPP that is forgivable.
Loans for less than $150k will see a one-page application for loan forgiveness.

Archived Information on First PPP Loan Program

Loan Forgiveness Resources

The Small Business Administration released an updated loan forgiveness application for companies that received $50,000 or less as part of the Paycheck Protection Program. Review the instructions for completing the application. (October 13, 2020)
Paycheck Protection Program Loan Forgiveness Application (October 1, 2020)
Treasury to Begin Processing PPP Loan Forgiveness Applications (September 30, 2020)
Updated SBA Guidance on the PPP in response to the PPP Flexibility Act (June 15, 2020)
Grandy & Associates webinar recording Covers the PPP loan application, how to fill it out, answered questions, etc. (June 3 2020)
SBA Releases PPP Forgiveness Application and Makes Critical Clarifications and Documentation Requirements (Entrepreneur, May 20, 2020)
U.S. Chamber of Commerce Guide to PPP Loan Forgiveness (May 20, 2020)

Loan Information for Borrowers

CARES Act: Implications for Employers (March 30, 2020)
IRS provides guidance under the CARES Act to taxpayers with net operating losses (April 13, 2020)
Paycheck Protection Program begins taking loan applications again (April 27, 2020)
SBA tool to find Paycheck Protection Program lenders
PPP Frequently Asked Questions
Application Form (U.S. Department of Treasury, April 1, 2020)
Small Business Paycheck Protection Program Overview – what it is, who is eligible, when to apply and how to apply (U.S. Department of Treasury, April 1, 2020)
- April 3: Small businesses (less than 500 employees) and sole proprietorships can start applying
- April 10: Self-employed individuals and independent contractors can start applying
Information Sheet for Borrowers (U.S. Department of Treasury, April 1, 2020)

Employee Retention Credit

Launched on March 31, 2020, the U.S. Department of the Treasury encourages businesses impacted by COVID-19 to use Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50 percent of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

Treasury Encourages Businesses Impacted by COVID-19 to Use Employee Retention Credit (U.S. Department of the Treasury, March 31, 2020)
CARES Act: Employee Retention Credit FAQs (United States Senate Committee on Finance, March 31, 2020)

Main Street Lending Program

Smaller companies that were shut out of PPP funding have a new option: the Federal Reserve's Main Street Lending Program has been expanded to apply to smaller employers. The program initially was for medium-sized companies seeking $1 million or more. Now, the program offers loans as low as $500,000 and as high as $10 million. The Main Street Lending Program is separate from the Paycheck Protection Program, which is primarily designed for companies with fewer than 500 employees. There are a couple of key differences: the Main Street program works as a traditional loan—without a provision for forgiveness—but does not require payments for the first year. Sign companies could qualify for both programs.

Federal Reserve Board announces it is expanding the scope and eligibility for the Main Street Lending Program (April 30, 2020)
Main Street Lending Program, Frequently Asked Questions (Federal Reserve, April 30, 2020)

Expanded Employee Retention Tax Credit

Information provided by the U.S. Chamber of Commerce

The Employee Retention Tax Credit, a refundable tax credit, was expanded in late 2021 in several ways that are beneficial to companies:

The new credit is 70% on $10,000 in wages per quarter, or a maximum of $14,000 per employee through June 30. (The previous credit was a maximum of $5,000).
Eligibility is for those employers who saw a decline of more than 20% in one quarter of 2020 when compared to the same quarter of 2019. (Previously, the decline had to be in excess of 50%).
Expanded the employee cap to 500 employees from 100.
Employers can receive both the ERTC and the PPP Loan, but cannot use the funds to cover the same payroll expenses.

Next: Main Street Lending Program

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Paycheck Protection Program (PPP)

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