PPP Round 2: A Guide for Local Businesses
Small business owners throughout the state have kept their eyes on the newest COVID-19 relief bill, the Consolidated Appropriations Act, with hopes that it would address their needs, the needs of their employees, and those of their communities. $288 billion has been allocated to aid small businesses and applications are set to open in early January 2021.
Local First AZ Members, Aniles & Co., CPA Firm and Ironwood Ventures have provided a breakdown of the relief package and highlighted the most important information for small businesses.
Here is everything you need to know:
Paycheck Protection Program Second Draw (PPP2) is a thing! Learn more about the program and find additional resources about qualifying and navigating the process below:
Separate funding has been allocated for live venues, independent movie theaters, talent representatives, non-profit museums, and more through the Save Our Stages Act.
Businesses in low-income communities should keep an eye out for the $20 billion allocated to provide Economic Injury Disaster Loans (EIDL).
The Employee Retention Tax Credit (ERTC) has been extended until June 2021 and is now able to be combined with the PPP Loan. The ERTC allows a percentage of payroll taxes to go back to employers that show a 20% decline in revenue.
Unemployment Insurance Benefits will be extended to March 2021.
Specifics on PPP 2:
As we mentioned above, the bill includes $288 billion in aid for small businesses and expands on the Paycheck Protection Program. This Second Draw is intended to provide aid and incentivizes businesses that have been impacted by COVID-19 to keep employees on their payroll. Here is a quick rundown for small businesses:
Both borrowers who received a PPP loan in the first round and first-time borrowers are eligible for PPP2.
Keep an eye out for The Necessity Requirement! The PPP loans are only for businesses that are not profitable or breaking even. Details about the repercussions of taking this funding without needing it are still unclear, but still, something to be wary of.
Forgiven PPP loans will be deductible, small business owners should consult their CPAs about the process and whether or not this is a good fit.
The PPP2 will cover additional expenditures such as personal protective equipment for workers, facility modifications, accounting needs, and more.
Wanting to learn a little more? This blog from the Journal of Accountancy includes a deep-dive into the bill and everything it covers.
Next steps for small business owners:
Don’t go through the process alone! Consult your CPA or reach out to our network of local accountants across Arizona through our Local First AZ e-directory.
Take advantage of the experts! There have been a number of organizations that have dedicated themselves to making this funding accessible and the process understandable for small business owners. Prestamos CDFI and Chicanos Por La Causa, for example, have a few upcoming webinars and prerecorded content available in Spanish and English!
Live venue operators, theatrical producers, talent representatives, movie houses, live performing arts organizations, and other cultural institutions can tune in for the SBA Shuttered Venue Operators Grant webinar on Thursday, January 14th for more information on the aid provided through the Save Our Stages Act .
U.S Representative Ruben Gallego, Chicanos Por La Cause, the SBA Arizona District Office, and others have assembled an in-depth webinar about the new round of funding. The webinar is being held on Thursday, January 14th.
The Arizona Commerce Authority held a Paycheck Protection Program focused Bootcamp & Resource Collective. Check out upcoming webinars in the series here.
Meet your local banks! Arizona banks were a lifeline for small businesses that desperately needed funding in 2020. They approved loans that the big banks wouldn’t, and we expect them to continue supporting small businesses in 2021. Here is an approved list of PPP lenders in Arizona put together by the U.S. Small Business Administration.
Take advantage of the 1-on-1 Consultations available to Local First AZ members.