In general, the loan amounts will be forgiven so long as: In other words, payroll cost is not increased by the employer’s share of payroll tax or reduced by taxes imposed on an employee and required to be withheld by the employer. Payroll costs are calculated on a gross basis without regard to federal taxes imposed or withheld. Payroll costs are capped at $100,000 per year for each employee (note: an employee’s cash compensation above $100,000 is not counted as part of the nonprofit’s payroll costs when calculating the amount of the loan, but the full cost of that employee’s benefits is counted). That amount is subject to a $10 million cap for first-draw PPP loans and a $2 million cap for second-draw PPP loans. Choose the period that reflects the largest payroll costs if you want to maximize your loan amount. Loans can be for up to 2.5 times your average monthly payroll costs during any of the following time periods: the 12 months before applying for the loan, calendar year 2019, or calendar year 2020. Following the passage of the American Rescue Plan Act, you can receive both a grant through the Shuttered Venue Operators Grant program and PPP funding, but your Shuttered Venue Operators Grant amount will be reduced by the amount of any PPP loan you received on or after December 27, 2020. The Economic Aid Act authorized $15 billion through the “Shuttered Venue Operators Grant” program for grants to live performance, museum, and movie theater operators that were forced to close due to the pandemic. Second-draw borrowers must also certify that the loan is necessary to support ongoing operations. Additional SBA guidance on how to calculate revenue reduction is available here. The amount of a forgiven PPP loan is excluded. (Special rules apply for entities that did not operate in 2019.) “Gross receipts” include the total amount the organization received from all sources during its annual accounting period, without subtracting any costs or expenses. You are eligible for a second-draw PPP loan if you have or will have used your first-draw PPP loan by the time you receive the second-draw PPP loan, have no more than 300 employees, and experienced a decline in gross receipts of at least 25% in any quarter of 2020 compared to the same quarter in 2019. You must certify on the PPP loan application that “urrent economic uncertainty makes th loan request necessary to support ongoing operations.” 501(c)(4) organizations are excluded from the PPP. 501(c)(3) and 501(c)(6) nonprofit organizations (such as professional associations and chambers of commerce) are among the entity types that may apply. In general, you are eligible for a first-draw PPP loan if you employ fewer than 500 employees (full-time and part-time) who live in the United States per physical location of your nonprofit, AND you were in operation on February 15, 2020. What types of organizations are eligible for a first- or second-draw PPP loan? If you need more help, you can try calling the SBA’s PPP customer service line which is available at (877) 552-2692 Monday through Friday from 8 am to 8 pm EST. Effective August 4, 2021, borrowers whose loans are $150,000 or less and whose lenders have opted in to the SBA’s direct forgiveness program can apply for loan forgiveness directly on the SBA’s PPP loan forgiveness portal.īelow are some frequently asked questions and answers with respect to the PPP that we hope will help you understand the program. To avoid having to begin making payments on your PPP loan, you should submit your loan forgiveness application within 10 months of the end of your covered loan period. You have until the maturity date of your PPP loan to apply for loan forgiveness. On May 28, 2021, the SBA announced that no new PPP applications would be accepted after that date because all PPP funding had been exhausted. The Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) was originally established under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide economic relief to small businesses and nonprofits that were financially impacted by the COVID-19 pandemic. The following FAQs are for informational purposes only and to assist borrowers who obtained PPP loans with their loan forgiveness applications. The SBA is no longer accepting new applications from participating lenders. The Paycheck Protection Program closed on May 28, 2021.
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