Last Friday April 24, 2020 a second round of the PPP AKA Paycheck Protection Program was approved and signed into order. With the benefit of hindsight and experience of Round 1 we can now offer even more pointers and helpful hints!
PPP – Paycheck Protection Plan Part 2 – Updated Tips
Do Not Delay – In less than two weeks the original program was completely diminished of all available funds, and this round has slightly less total funding.
Double Check Original Loan if you missed – If you tried with no success in round one, immediately contact your bank and status your original application… fingers crossed in not loosing our place in line, but each lender may treat this differently.
Smaller is Better – The big banks are having trouble processing these likely due to volume – if you have a small banking contact that’s a better possibility – if you do not have a small banking contact right now an attempt to arrange one will likely be fruitless as they will be very busy as well and are taking original clients first.
Sole-Proprietors and Business Owners -As a reminder this plan is for Sole Proprietors – Self-Employed or Businesses with employees who have been adversely affected in one way or another by the lock down/Virus.
Reminder of Loan Amount and Terms – The loan is for 2 1/2 times your monthly average for last year as long as you have the same or more employees and will be available and if the loan is used in eight weeks with 75% or more being payroll it will be forgiven! No taxes, totally free money!
Open a New Account for Funds -Not surprisingly there were some buyers remorse and the federal government has let it be known that they’re serious about the use of these funds. We highly recommend you open a second account and keep copious records on how you’re using these funds or you may have scrutiny problems in the future dealing with forgiveness!
Pandemic Unemployment May Make More Sense – Those self-employed if you showed little or low income last year you may be better off to attempt the Pandemic Unemployment Benefit which is $600 a week for Four months or until income commences – TIP- Our experience with this is that the unemployment agencies of the separate states are extremely backed up and will likely take a longer period of time to commence these benefits – Be patient!
Again, time is of the essence, if you missed Part 1, get going … these funds likely will not last long!
Have a Great “PPP Part 2” Day!
John A. Kvale CFA, CFP