PPP and EIDL Loan Program

Updates and Extensions

There have been a lot of updates to the PPP and EIDL loan programs, and the situation continues to evolve. We will highlight the most pertinent points here for reference.

PPP application deadline extended

You can still apply for a loan through this program until August 8. There are still funds available – $130 billion of the $670 allocated for this loan program as of July 6th. Start with your own bank to see if they are accepting applications, and if no, we recommend applying through Lendio, BlueVine, or similar big lender. (It’s okay to have multiple applications pending, as long as you only accept one offer in the end.)

PPP loan forgiveness terms extended

Originally, you had only eight weeks to spend the PPP loan proceeds. This has changed, and you have up to 24 weeks to spend the money on qualified expenses. However, if you applied under the original loan terms, the extended terms might not be given to you automatically – this is one of those remaining gray areas. We strongly recommend you contact your lender and ask what you need to do to get the extended loan forgiveness terms.

Deadline for applying for PPP loan forgiveness

You have 10 months to apply for forgiveness, counting from the end of either the 8 week or 24 week period. However, you can apply for forgiveness as soon as you have used up the loan proceeds. There is now an “EZ PPP Loan Forgiveness Application” that you can use if you are self-employed with no employees, or if you did not significantly reduce your workforce. The exact terms are laid out in the instructions. These applications need to be submitted directly to your lender along with supporting documentation.  The lender will submit it to the SBA. Contact your lender for instructions pertaining to your loan. Here are the links to the applications for reference:

• Revised PPP Loan Forgiveness Application and instructions
• EZ PPP Loan Forgiveness Application and instructions

Supporting documentation for PPP loans

Wherever possible, we highly recommend keeping things as simple as possible. If you have the ability to spend 100% of the loan proceeds on gross wages, that is best. Then all you need to provide is some payroll reports and returns. For example, to get 100% of your loan forgiven, if you have the choice between documenting two months’ worth of gross wages plus health benefit payments, rent, and utilities, or just providing four months’ worth of gross wages, go with the four months of gross wages. The documentation required will be much simpler, and your lender will have far fewer questions on your application.

EIDL Loan Program Update

The SBA portal for loan applications has been reopened. Unlike the PPP loan, this loan goes directly through the SBA. The loan terms they are offering are extremely favorable: 30 years at 3.75% interest. (2.75% for nonprofits.) Based on what we are seeing, the turnaround time for receiving these loans is now very quick – usually 1-2 weeks from date of initial application. The application asks for some revenue data for the period 2/1/2019 – 1/31/2020, and the loan offer is based off of these numbers.

If you are applying for any of these loan programs, or applying for PPP forgiveness, your bookkeeper or payroll processor should be able to provide you with any needed documentation, such as payroll reports or P&L statements. If you need a bookkeeper, or are looking for someone to help you with payroll, request a quote here.