‘Get your ducks in a row’ for upcoming round of PPP funds

A fresh round of Paycheck Protection Program loans worth more than $284 billion will soon be available to small businesses. The funds are just a slice of the $900 pandemic relief bill Congress passed Monday.

So-called PPP2 loans will be available for qualified first-time borrowers with 300 or fewer employees as well as sole proprietors, independent contractors, and eligible self-employed workers. For the first time, news and some nonprofit organizations will be eligible for the funds.

Businesses that received funds in the first go-around may reapply, provided they have 300 or fewer employees and can demonstrate a 25% gross revenue decline in any 2020 quarter compared to the same quarter last year.

Borrowers such as hotels and restaurants have an added boost and can get up to 3.5 times their average monthly payroll costs, subject to a $2 million maximum, compared to 2.5 times for other borrowers.

The stimulus packages also carves out a $15 billion slice for theaters, live venues and other cultural institutions. Another $15 billion will be set aside for community development financial institutions or CDFIs, and minority depository institutions in an effort to make it easier for low-income and underrepresented small business owners to receive aid this time around.

The Small Business Administration has yet to announce when the application portal will open. In its first iteration, applications went live on April 10 — two weeks after the CARES Act that created the program was signed into law.

More than five million businesses nationally received over $523 billion in PPP loans since March.

Interest this time around will likely exceed the first round, said Mitch Helfer, certified public accountant and owner of CPA Miami.

“A lot of people who should’ve applied the first time but didn’t are now very interested,” Helfer said. Demand was so high earlier this year that his firm had to install an automated message to field calls from clients asking about PPP loans.

Helfer has already started to receive calls a day after the new loans were announced. His advice to applicants? Get your ducks in a row.

“You should take advantage of what’s there for you because there is a certain amount of uncertainty on what’s going to happen going forward,” said Helfer. “You don’t have to take the money – you don’t even have to use it, but it’s nice to know it’s available.

The upcoming PPP loans will be a welcome shot in the arm for many of Miami’s small business owners, said Kathleen Murphy, executive director of the Miami Bayside Foundation, a local nonprofit and certified CDFI.

“It’s very necessary right now because so many small businesses are suffering,” Murphy said.

The organization helps businesses including startups that are unable to get loans from a traditional bank. They fielded hundreds of calls when PPP funds first rolled out in March and CDFIs were originally sidelined.

This story was originally published December 23, 2020 at 9:07 AM.