The Paycheck Protection Plan, better known as the “PPP,” was implemented back in early 2020 when the global situation took a turn for the worst. The plan was implemented as a way to keep businesses afloat so they can keep giving paychecks to their employees.
If you own a business and you’re looking to draw from the PPP loans, then you might be wondering whether you even qualify. Your qualifications will depend on a number of factors. Read on to learn what you’ll need to qualify for the second round of PPP loans.
Did you draw from the first round of PPP loans? If so, you’ll need to answer a few questions before you can qualify for the second. Was your business operational before February 15, 2020, is your business is still open and operational, and do you have less than 500 employees? If the answers to these questions are all “yes,” you might qualify. Additionally, if you have multiple branch locations, you need to have less than 500 employees per location.
If this will be your second time drawing a PPP loan, then you’ve got some different criteria to hit before you qualify. Things will be a bit more complicated for this one.
In order to qualify for a second loan, you first need to have used the entirety of your first loan. Other than this, the qualifications are largely similar to the first loan, though you need to have less than 300 employees, not 500. Like the first, you still need to have been operational before February 15 of 2020, and you need to still be open and operational.
Another distinction in the second loan qualifications is that you need to show a loss of twenty-five percent of your gross revenue compared to 2019. You can do this by showing your tax return from 2020 compared to your return from 2019, or just by comparing any quarter from 2020 with the same quarter in 2019.
You could be disqualified from receiving a loan if your business opened after February 15, 2020, if your business is bankrupt, or if your business is a hedge fund. Other disqualifying characteristics include if an owner of more than 20 percent of the business has a criminal record containing fraud, or if your business has defaulted on a loan from the federal government in the last seven years.