With the passing of the New COVID and Stimulus Package, the PPP underwent some major changes to the forgiveness rules, qualified expenses, and other qualification rules when applying! If you own a business with or without employees, the PPP (Paycheck Protection Program) can be a great lifeline to keep your struggling business open! **Disclaimer** I am not a representative or an employee of the Small Business Administration (SBA) or a lending institution. This video is only my opinion and interpretation of the recent updates made to the Paycheck Protection Program. EIDL Grant: Will We See The Return of FREE $10,00 Grant? https://www.youtube.com/watch?v=2qdtqjysmuw&feature=youtu.be Now right away, the package says that the SBA has 10 days to start making these changes and implementing them for any new PPP loan applicants or second-time draws. First, which business qualifies for the PPP loan. Now, if you applied for the PPP in the past, can you apply for it again? The answer is YES! PPP Loan recipients must show that they lost 30% of gross revenue during the same quarter in 2019. The borrower must not have more than 300 employees $2 million dollars is the cap. Now in regards to the term of the PPP loan, – According to the SBA, the PPP loans have an interest rate of 1%, a maturity term of 5 years, no collateral or personal guarantees are required, and no fees to apply. The second thing I want to hit is that the PPP now includes Additional Expenses that are qualified for the rule of forgiveness (SEC. 304. ADDITIONAL ELIGIBLE EXPENSES.) covered operations expenditures Covered property damage costs, covered supplier costs, and covered worker protection expenditures, Second, Covered Property Damage costs… This is any cost related to property damage, looting, vandalism due to civil unrest during 2020 that were not covered by insurance or other compensation., Third, covered supplier costs… This is any expenses related to a supplier of goods. This can be perishable goods (like food), any contracts made before the pandemic, and any supplies essential to the operation of the business. This could also mean raw materials if you create any physical goods. Fourth, the covered worker protection expenditure means any new equipment or repairs to drive through window facility, air ventilation system, physical barriers, masks, on-site health screening, expansion of indoor, outdoor, or combined space, and even air filter systems. All of these are basically protection for the virus and keeping workers safe. Now, that leads to another concern that was brought up many months ago and that has to do with the tax deduction question on these expenses. A few months ago, the IRS released a memo saying that any expenses used for loan forgiveness could not be used for a tax deduction… That meant that the business owners could receive loan forgiveness but may need to pay more taxes. Clearly, this was concerning. So bottom line, to receive the forgiveness, you’ll need to contact your PPP lender for the forgiveness application process. In respect to how much of the expenses can be used for the forgiveness of the loan, The covered Period for forgiveness on expenses is beginning on the 8th week after origination and ending on the 24th week after the origination.
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