With the current article we would like to answer the most important questions of our clients regarding the second round of the PPP. As last year, loans under the PPP are applied for through banks. The Small Business Administration oversees the process. Please contact us, your accountants and especially your banker early to participate in time.

The most important points first:

• Most banks will begin taking applications on January 19, 2021
• The deadline for participation in the current PPP is March 31, 2021. However, Federal funds might run out earlier.
• Your company must have been active since February 15, 2020.
• You need a Tax Identification Number of the applicant’s (foreign) owner (SSN for individuals/EIN for entities); we can help with the applications; the processing times vary between a few days and weeks.

The general terms are can be summarized as follows:
First Time Applicants
If you are applying for the loan for the first time, the "old" conditions will continue to apply, i.e.:

• No more than 500 employees worldwide in the group
• No more than $10 million

Second Time Applicants
If your U.S. subsidiary already received a PPP loan last year and you now want to participate in the program again, the following conditions apply:

• No more than 300 employees worldwide in the group
• The first loan is already (or will be) spent in full
• At least 25 percent decline in revenue since comparable prior-year quarter (new business-carve-out rule)
• Businesses in the food service / hospitality industry (NAICS code 72) can apply for a loan of 3.5 times average monthly payroll costs
• For all other businesses, the previous factor of 2.5 applies
• Maximum loan amount: $2 million

Both 1st and second time recipients need to spend at least 60% of the loan amount on payroll costs, a maximum of 40% can be spent on other purposes. The following overview breaks down what was in place then and what is now newly added:

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