If you run a small business, you want to REALLY be on top of the PPP law changes that are going into effect.
Here's a summary:
1. Program is restarting with the leftover money from last time plus roughly another $150B. That's a lot. But may go quickly.
2. If you got short-changed last time, you may be able to "top off" your loan to the right amount. These are called PPP loan amount increases.
3. If your business has suffered a 25 percent drop in revenues (as compared usually to the same quarter in 2019), you can get a second PPP loan. E.g., if you got $100K first time? You can maybe get $100K "second draw" PPP loan. (That's what these are called.)
4. The PPP money is now tax free. Congress makes that clear in the new bill. I.e., the loan forgiveness isn't taxable. The spending you fund with PPP money leads to deductions. A technical point, if you run a partnership or S corp, you get "basis" for the PPP forgiveness income.
5. If you borrowed $150K or less, the new forgiveness application process, which isn't available yet, basically works as an honor system. You certify your numbers are right. You get forgiveness. The SBA could audit you...Bottomline, though, you don't provide a pile of paperwork. (So, basically, this works the same way a tax return works.)
If your have a small business that's been beat up by Covid-19, these changes and the restarting of the program may be the help you need to get back into action.
So the takeaway: Stay on top of your bank's timeline and be ready!
Happy holidays everyone...