By Juanice Gray, email@example.com
Published Jan. 14, 2021
Small businesses recently got some good news; the $900 billion relief act signed into law by President Donald Trump granted additional funding for the Paycheck Protection Program. The forgivable loan program was established by the CARES Act.
With $284 billion set aside, this gives businesses that weren’t approved for the first round a chance to apply, effective last Monday, Jan. 11. In addition, businesses still being affected by the pandemic can apply for a second round of funding effective Wednesday, Jan. 13.
Businesses that use the money for payroll have a better chance at making the loans tax-free.
If applying for a first time loan
Loans are capped at $2 million this round. Businesses and the self-employed should have their tax return materials on file, payments for rent and utilities as well as payroll information and employment records.
The new law also allows some businesses to apply for a second loan.
To qualify, businesses must have spent all of their first loan, have less than 300 employees and prove that they lost 25% or more of revenue in any quarter in 2020.
Businesses will need their 2019 tax return on hand as well as profit and loss records to show that they’ve had at least one quarter where revenue fell 25% or more.