On December 27, 2020, President Trump approved a new COVID economic relief package, which included an additional $284 billion in funding for the Paycheck Protection Program (PPP) for small businesses, as well as several updates regarding eligibility, forgivable expenses, and tax deductions.
The new program will provide much-needed aid to many companies that did not receive PPP funds in the first round, particularly minority- and woman-owned businesses. It will also give companies the opportunity to apply for a second round of funding if they can prove a significant loss in year over year revenue, from 2019 to 2020.
Steps you can take now to help prepare for your application:
One thing to consider this time around is that companies will be expected to provide adequate documentation in order to qualify for PPP funding and/or loan forgiveness. That’s why it’s important to do what you can now to make sure that you’re positioned to act quickly on your end when the time comes.
- Request updates to your company information for free – You can use D‑U‑N‑S® Manager to request updates to the business information in your credit file with Dun & Bradstreet. This can help ensure that the information in your file matches the information on your application and can help lenders who use Dun & Bradstreet confirm your business information.
- Know what’s in your business credit file – CreditSignal®* can show you not only the business information lenders and other businesses can see when they look at your company’s file, but also the scores and ratings they may use to help evaluate your business as well.
- Review the current PPP application – once you’ve updated your company information and have a clearer picture of what’s in your business credit file, you can review the original PPP application to start assessing your eligibility for funding and find out what type of information you’ll need to collect.
- Check back regularly for updates – as of the writing of this article, all details of the new stimulus package have not been made public, and the Small Business Administration’s (SBA’s) updated PPP application is not yet available. However, once it is, you’ll want to be able to act quickly, so be sure to check back here or visit the SBA’s website often for new information.
What Else Is New
In addition to allocating more funds to the PPP, Congress has also expanded the list of forgivable expenses to include such things as supplier costs and personal protective equipment (PPE).
This is good news for PPP recipients, their customers, and their partners alike, as it can support not just the financial health of the businesses involved, but also the physical health of the employees and customers who do business with each other day-to-day.
Perhaps one of the most welcome updates to come out of the new plan is that PPP expenses can now be tax deductible. This could provide considerable relief to a lot of companies that are still struggling to stay in businesses.
Overall, round two of the PPP will benefit a lot of small businesses, but it’s not the only thing that can help companies survive this financial crisis. There are other things you can do to help protect your business. Visit my article on Protecting Your Business During Uncertainty for additional information on steps you can take to help both now and in the future.
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