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How To Apply
Additional Paycheck Protection Program (PPP) funds are expected to become available January 2021. Capitalize is accepting completed applications ready to be sent out. Our application is an encrypted form to ensure your submission data is transferred and stored securely within our system.
First-Time PPP Loan Requirements
The Small Business Administration (SBA) has released the requirements for the new round of PPP loans.
Requirements:
- Your business was in operation as of February 15, 2020
- You’re an independent contractor or sole proprietor, or your business/organization has either employees or independent contractors for whom they have associated payroll costs
- You certify that your business has sustained economic damage due to COVID-1
Second-Time PPP Available Soon
If you applied for the first round of PPP and it wasn’t enough to help sustain your business during the COVID-19 pandemic, you may still be eligible for a second round of PPP.
The criteria you need to qualify for a second PPP loan:
- Your business employs less than 300 employees
- Used or will use the full amount of their first PPP loan on or before the expected date for the second PPP loan to be disbursed to the borrower. The IFR also clarifies that the borrower must have spent the full amount of the first PPP loan on eligible expenses.
- Ability to show a 25% revenue deduction during the first, second, or third quarter of 2020 relative to the same quarter in 2019
How Long Will It Take To Receive Funds?
Once a borrower receives a Preferred Lender Program (PLP) number for their loan, the loan is approved by the SBA, and funds are reserved for the borrower. Starting on the date a borrower receives a PLP number, the lender has 10 calendar days to disburse funds. The loan must be disbursed in full, and the 24-week loan forgiveness period begins the day funds are disbursed.
A lender cannot disburse funds due to delays from a borrower, like missing paperwork — the lender has 20 days to disburse funds. If they haven’t received the necessary information from the borrower by the end of that 20-day period, the loan may be canceled. The loan funds are designated for the refinancing of an Economic Injury and Disaster Loan (EIDL), the funds will be deducted from the disbursement amount and paid directly to the SBA by the lender.
What To Utilize The PPP Loans For
The Paycheck Protection Program will help small businesses, including sole proprietors and independent contractors, and private nonprofits to maintain payrolls and continue payments such as rent and utilities. All the uses of the loans are:
- Payroll Costs: Salaries, wages, commissions (or similar compensation), cash tips payments or the equivalent.
- Healthcare costs
- Mortgage interest payments (not payments to mortgage principal)
- Rent & utilities
- Operations expenditures
- Covered property damage costs
- Supplier costs
- Covered worker protection expenditures
- Interest on any other debt obligations incurred before a specific period (the SBA should release more details on this soon)
When Do The Payments Start?
For portions of the loan that are not forgiven, payments are deferred for the first 6 months. But keep in mind that interest will accrue during the 6-month deferral period.
PPP Loan Extension For Businesses Hit The Hardest
If you own/are:
- A restaurant, hotel, or live venue that falls under an NAICS code starting with “72”, you are able to apply for 3.5 times your monthly payroll costs.
- A live event or production company that was forced to close, you may be eligible for a special grant.
- BIPOC business owner, you’ll have access to $12 billion that has been specifically set aside for underserved businesses.
Can You Get a PPP Loan if You Have Other Loans?
Yes, you can qualify for a PPP loan even if you already have other loans, including other SBA loans. However, you cannot use the funds from PPP loans and other loans for duplicate use at the same time. For example, if you use a disaster loan (EIDL or loan advance) to pay your business’s rent in February, you cannot also apply for a PPP loan to cover February rent.
How is The PPP Calculated?
PPP loans are calculated based on 2.5 times your business’s (or organization’s) monthly payroll costs, although some businesses will qualify for 3.5 times monthly payroll costs (as referenced above).
Is The PPP Tax-Deductible?
Yes, your PPP expenses will now be tax-deductible. Your business must spend at least 60% of the PPP on payroll costs and 40% on other costs.
PPP Forgiveness
Please click the button below to know everything about the PPP loan forgiveness!