New relief package approved with additional PPP funding for small businesses

New relief package approved with additional PPP funding for small businesses

Note: PPP borrowers may engage the services of an accountant to track the use of their PPP funds.  However, only the borrower or an authorized representative who is legally permitted to make certifications on the borrower’s behalf may submit an application for loan forgiveness.  Accountants should be aware of this limitation and ensure that an authorized representative of the borrower understands his or her obligation to complete, review, and certify to the contents of any loan forgiveness application.

On December 27, a new Coronavirus Response and Relief Supplemental Appropriations Act of 2021 was signed into law. This new relief package includes an additional $284.45 billion in funding for Paycheck Protection Program (PPP) loans to help small businesses.

In addition to providing funds for first-time borrowers, the new law provides small businesses with an opportunity to apply for a second PPP loan if they have fewer than 300 employees and can show a reduction of at least 25% in revenue in 2020 compared to their 2019 revenue.1 The maximum loan amount for PPP second-time borrowers is $2 million.

We are currently working on a way to support our customers during this next round of PPP funding. Once we have more information to share, we will inform all of our eligible customers immediately.

The new law calls for a simpler loan forgiveness application for PPP loans of $150,000 or less.  Therefore, we’re continuing to build out our online forgiveness experience within QuickBooks Capital based on the latest guidance.

Frequently Asked Questions

What is the Paycheck Protection Program?

A: The Paycheck Protection Program was originally created under the Coronavirus Aid, Relief, and Economic Security Act (or CARES Act). It is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

What is in the new COVID relief package?

A: Congress recently passed The Coronavirus Response and Relief Supplemental Appropriations Act of 2021, a $900 billion COVID relief package to deliver the second round of economic stimulus for individuals, families, and businesses. The Act was signed into law on December 27, 2020. The relief package includes an additional $284.45 billion in funding for first-time and second draw PPP loans to help small businesses.

In addition to providing funds for first-time borrowers, the new legislation provides small businesses the opportunity to apply for a second PPP loan if they have fewer than 300 employees and can show a reduction of at least 25% in revenue in 2020 compared to their 2019 revenue. The maximum loan amount for PPP second-time borrowers is $2 million. Additionally, PPP borrowers can now deduct from their taxes any expenses paid using PPP loan proceeds.

The law creates a further simplified PPP loan forgiveness application for loans of $150,000 or less. The PPP borrower will only need to sign and submit a one-page certification. The law requires the SBA to establish this form within 24 days of enactment. This simplified loan forgiveness process is retroactive and will apply to PPP loans of $150,000 or less, including loans from the first round of funding. The law also expands the list of expenses that are eligible for loan forgiveness.

Q: When will funds become available through the PPP?

A: While the new relief package has been signed into law, there are several steps required before loans become available. This includes the Small Business Administration providing guidelines about the overall loan process and eligibility. As more information becomes available, we will share more details.

Q: When will you open the application in QuickBooks to apply for a PPP loan?

A: We are currently working on a way to support our customers during this next round of PPP funding. Once we have more information to share, we will inform all of our eligible customers immediately. SBA lenders can be found at the SBA.gov.

Q: Who is eligible for a second PPP loan?

A: The new law states that PPP borrowers with fewer than 300 employees and can show a reduction of at least 25% in revenue in 2020 compared to their 2019 revenue are eligible for a second PPP loan. We are currently working on a way to support our customers during this next round of PPP funding.

Q: Are you providing first-time PPP loans within QuickBooks Capital?

A: At this time, we are not providing first-time PPP loans to customers. Eligible borrowers interested in applying for their first PPP loan may apply through other SBA-approved lenders.2  More information on approved-SBA lenders can be found at the SBA.gov.

Q: How much money will I be able to apply for through PPP?

A: The new relief package includes an additional $284.45 billion in funding for Paycheck Protection Program (PPP) loans to help small businesses. In addition to providing funds for first-time borrowers, the new law provides small businesses with an opportunity to apply for a second PPP loan if they have fewer than 300 employees and can show a reduction of at least 25% in revenue in 2020 compared to their 2019 revenue.1 The maximum loan amount for PPP second-time borrowers is $2 million.

Q: I already took out a PPP loan through QuickBooks Capital. Can I get another loan?

A: We are currently working on a way to support our customers during this next round of PPP funding. Once we have more information to share, we will inform all of our eligible customers immediately.

PPP borrowers that have fewer than 300 employees and can show a reduction of at least 25% in revenue in 2020 compared to their 2019 revenue are eligible for a second PPP loan. The maximum loan amount for PPP second-time borrowers is $2 million.

Q: I applied for a PPP loan through QuickBooks Capital before. When can I apply for loan forgiveness?

A: The new legislation calls for a simpler loan forgiveness application for PPP loans of $150,000 or less. Therefore, we are continuing to build out this online forgiveness experience within QuickBooks Capital based on this latest guidance. You will receive a notification in your account and/or via email as soon as we are ready to accept your loan forgiveness application online. Eligible customers that received PPP funding in 2020 can apply for another loan, whether they have started their loan forgiveness application process or not. For more information about PPP loan forgiveness, visit our Paycheck Protection Program loan forgiveness article.

Q: When is the deadline to apply for forgiveness for my first loan?

A: The deadline to apply for forgiveness is the maturity date of your loan. If you received your funds on or before June 5, 2020, you have a two-year term. If you received your funds after June 9, 2020, you have a five-year term.

Loan payments of principal and interest are deferred as long as you apply for forgiveness within 10 months after the last day of your Covered Period, although interest will continue to accrue during this period.

If you are unsure when you received your funds, you can confirm with the bank into which your PPP funds were deposited.

Disclaimers

1Second PPP loans are subject to additional eligibility requirements and criteria.

2Subject to eligibility requirements.

Regulations and guidance from the SBA and the U.S. Department of the Treasury on the PPP are evolving rapidly and the above information may be outdated. Please refer to the latest guidance from SBA and Treasury to confirm current program rules. The funding described herein is made available to businesses located in the United States of America and are not available in other locations. Given the large demand for additional authorized Paycheck Protection Program funds, not every qualified Paycheck Protection Program applicant will receive a loan. Previous approval of a Paycheck Protection Program loan does not guarantee approval of a second PPP loan.

Paycheck Protection Program (PPP) loans offered within QuickBooks Capital may be made by Intuit Financing Inc. (d/b/a QuickBooks Capital) or by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC.

This content is for information purposes only and should not be considered legal, accounting or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Financing Inc. (d/b/a QuickBooks Capital) and Cross River Bank do not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Financing Inc. (d/b/a QuickBooks Capital) and Cross River Bank do not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.

This information is provided as a courtesy. Nothing in these materials is intended to, and does not, create an agency relationship with Intuit Financing Inc. (d/b/a QuickBooks Capital), or any right to fees from QuickBooks Capital for any services you may provide to borrowers. QuickBooks Capital will not compensate any person or entity assisting a borrower without first having executed a written compensation agreement with both the borrower and agent, and by providing this information, QuickBooks Capital does not agree that it will enter (or has entered) into any written compensation agreement with any person or entity.