- SBA will issue guidance on a new round of PPP funding, but small businesses can begin getting the necessary paperwork in order now
- Payroll information, employment records, tax documents, and other paperwork should be at the ready
- Working with an accountant, bookkeeper, or other financial professional is key
As part of a $900 billion stimulus package approved last month, the Paycheck Protection Program will be revived with $284 billion available for forgivable loans. While the program’s timeline and detailed guidance are forthcoming from the U.S. Small Business Administration, business owners can start getting the necessary documents in order to help streamline the process if they apply for a loan.
Review the program’s eligibility requirements and terms. The new round of PPP is open to new applicants, previous recipients who have exhausted their funds, and a variety of newly eligible entities such as nonprofits and news organizations. However, the funds will also be reserved for smaller companies that have experienced significant revenue losses during the COVID-19 pandemic.
While PPP applicants formerly only needed to certify an economic need for a loan, applicants in the next round must demonstrate that they experienced a 25 percent annual loss of revenue in at least one quarter of 2020. Business owners should have tax documents, payroll information, employment records, and copies of expenses such as rent or utilities available to help back up their application.
Employers must also be prepared to retain employment records for four years and other relevant records for three years. However, a simplified forgiveness process is available for loans of $150,000 or less.
Business owners should connect with an accountant, bookkeeper, or other financial professional to assist them in preparing for a loan application. They can also contact their lender to get more information on how PPP funding will be disbursed.
