The SBA published new information about the PPP on Wednesday, which includes changes for the first round of funding, as well as preliminary guidance for round two.

Here are some of the key changes:

• Eligible expenses for both rounds now include operations expenditures, property damage costs, supplier costs, and covered worker protection expenditures.
• Expenses used for forgiveness are tax deductible.
• Businesses that received a PPP loan can now take the Employee Retention Tax Credit, but the credit is not available for the wages paid with the proceeds of the forgiven portion of the PPP loan.
• PPP forgiveness will NOT be reduced by the Economic Injury Disaster Grant.

Guidance for round two:

• Companies that have less than 300 employees and have experienced a decrease in sales of 25% in any quarter of 2020, compared to the same quarter in 2019, will qualify to apply for a second forgivable PPP loan.
• Employee counts will be done by physical location, and each physical location will be subject to a 300 person employee count.
• For the loan calculation, most businesses will use the same calculation as round one, which is monthly payroll costs x 2.5. 
• Businesses with NAICS Code starting with 72 (restaurants, hospitality, etc.) can use a multiplier of 3.5 instead of 2.5.
• Monthly payroll cost used for calculating the loan amount can be calendar year 2019 or the twelve months preceding loan application.
• The maximum loan amount is $2 million. The maximum loan amount for affiliated corporate groups is $4 million.

These are just some of the key points you should consider when making your plans. Keep in mind that your lender will need time to prepare for these changes, and may not yet be ready to provide you with additional guidance. 

Here is a link to the SBA Interim Final Rule. We will keep you up-to-date as we learn new developments. As always, contact us if you have questions or need assistance.

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