Applications Are Opening for PPP2 Forgivable Loans

As we announced in our December 29th article, Congress has authorized a second draw Payroll Protection Program (PPP2).

The PPP2 loan program is very much like the first round, in that it is a loan that can be forgiven if the proceeds are spent on appropriate authorized expenditures (like payroll). But there are a few differences…

The most important of these differences is that the second draw PPP will be limited to businesses that can show an adverse effect from Covid-19. Nearly all of ASA’s members have been dramatically affected by Covid-19 so hopefully most of our members will be eligible for this program. The manner in which you must show adverse effect is by comparing your 2020 quarterly gross receipts with those of the corollary 2019 quarter. If you can demonstrate that your quarterly gross receipts dropped by 25 percent or more from the corollary 2109 gross receipts for the same quarter, then you meet this prong of the eligibility test. There are also special rules if you were not in business for all of 2019.

Another change is that the maximum business size drops from 500 employees (for PPP) down to 300 employees (for PPP2).

Please note that there are other detailed requirements not repeated in this blog article!

The SBA has published information on PPP2 loans. One particularly useful document explains how to calculate your maximum loan. The SBA information includes a model application form for PPP2 loans. Expect your bank’s application form to look similar but it may not be exactly the same. It appears that some banks have begun to accept applications for PPP2 loans, while others have not yet begun to accept them (but ought to be doing so, soon).

About Jason Dickstein
Mr. Dickstein is the President of the Washington Aviation Group, a Washington, DC-based aviation law firm. Since 1992, he has represented aviation trade associations and businesses that include aircraft and aircraft parts manufacturers, distributors, and repair stations, as well as both commercial and private operators. Blog content published by Mr. Dickstein is not legal advice; and may not reflect all possible fact patterns. Readers should exercise care when applying information from blog articles to their own fact patterns.

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