Round one of the Paycheck Protection Program in early April was pretty frustrating for many small businesses. Although almost $350 million had been appropriated, the funds ran out quickly. The good news is the federal government has appropriated more funds, and lenders are re-opening their pipeline immediately. Queued-up applications are expected to be handled first, followed by new applicants.
As with the last appropriation, there likely will be a rush of new applications, so be prepared! For small businesses – including self-employed individuals and independent contractors, both of whom are eligible – be sure to have your financial and business formation information ready to be submitted. Some or all of the following items will need to be provided, usually by PDF upload to your bank:
- Payroll information such as Federal Form 941s;
- For independent contractors, their 2019 1099 forms and/or other credible evidence of income;
- For partners, their K-1s;
- For self-employed individuals, the Schedule C from their 2018 or 2019 tax returns;
- Business organizing documents (certified articles of organization and operating agreement for an LLC, for example);
- Financial statements such as 2019 Profit & Loss and 2019 Balance Sheet; and
- Proof of identity (a passport, drivers license, or other photo identification).
This time around, the feds have made clear that publicly-traded companies are not eligible to apply for funds. The public companies that received funds in the first round have only until May 7th to return the loan proceeds or face “severe consequences,” according to the Treasury Department. Generally, that’s good news for Main Street businesses.
Remember that the applications require certain certifications as well. Be sure to read them carefully and ensure you can truthfully certify to the facts contained in the application. Ultimately, a PPP loan creates an obligation to repay the funds unless certain conditions are met.
We’re still waiting from the Treasury Department’s final guidance on the calculations about forgiveness of funds, so stay tuned to our COVID-19 Updates for fast-breaking information. The attorneys at The Coppola Firm are here to help.
