Last night, Congressmen Sean Casten and Bill Foster hosted a webinar along with Rob Steiner of Small Business Administration – Illinois Office for small business owners.
They discussed the next round of aid for small businesses, which includes $325 billion, the bulk of which is another Paycheck Protection Program (PPP). And in this round, businesses and nonprofits will be able to take out a second PPP loan if they meet eligibility requirements.
Second PPP Loan Option
“Probably the most significant change is that while the past rounds of PPP contemplated that you would be taking a first loan out, this also includes provisions to allow you to take a second loan if you’ve already substantially exhausted your first proceeds,” Casten said. “There’s some constraints on that, but we recognize that this crisis has taken a little bit longer.”
While small businesses with less than 500 employees are eligible for a first PPP loan, that criteria tightens to businesses with less than 300 employees for a second loan. Businesses can also qualify for revenue-based size standards for some industries, if they don’t meet the employee requirements.
“Because this pandemic has extended so long, it gives businesses another lifeline to help support their employees and those ongoing working capital expenses,” said Steiner.
Other requirements for a second loan are that you must have spent all your first loan funds on eligible expenses, and the ability to show a 25% revenue reduction in one calendar quarter in 2020 versus the same quarter in 2019.
For businesses that want to apply to have their loan forgiven, the application should be done through the lender that granted the loan. The lender then sends the application to the Small Business Administration who reviews the application and determines if the business is eligible for partial or complete loan forgiveness.
“We hope, and I think the intent is that businesses use the funds appropriately and receive the maximum amount of forgiveness they can,” said Steiner.
Unlike other loan programs, forgiven PPP loans are not taxable income. As well, any expenses that you use to support your forgiven amount are tax deductible.
Other stimulus programs for small businesses
If your business does not qualify for PPP loans, the good news is, there are more programs in the works. The Shuttered Venue Operators Grant Program is designed for live performance venues, independent movie theaters, and museums. Steiner said they are still working on that program and it isn’t available for application yet, but they hope to soon offer some relief to venues that have been unable to operate during the pandemic.
Another program is the Targeted Economic Injury Disaster Loan (EIDL) Advance Program. To qualify, your business must employ 300 or fewer employees, be located in low income community, and be able to demonstrate a 30% decrease in revenue over an eight-week period in 2020 compared to the same period in 2019. SBA is not taking new applicants for that program, but instead are evaluating prior applicants.
Both Casten and Foster stressed that these programs are targeted toward relieving small businesses, but the best way to help is to take all public health precautions seriously to bring us closer to the end of the pandemic.
“We will not get through this economic crisis until we get through the public health crisis, and everything we can do to get through the public health crisis a little quicker makes all of our economic lives easier,” said Casten. “Yes, that includes vaccines, but it also includes social distancing and washing your hands and wearing masks and all those other things. So please continue to exercise good public health measures whether or not you’ve had access to the vaccine.”
The complete webinar is available on Congressman Casten’s Facebook page.
Naperville News 17’s Casey Krajewski reports.
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