The Paycheck Protection Program (PPP) provides loans to businesses during the COVID-19 crisis to keep people employed. The government can forgive some of these loans, giving these small businesses a leg up during this unexpected, global event. Your shop may qualify for a PPP loan, even if you’ve already gotten one. Check out the PPP section of the SBA website for the most up-to-date information.
The Paycheck Protection Program is for small businesses. Specifically, businesses with 20 or fewer employees and sole proprietors. The window to apply for this loan started on February 24, 2021, and runs through March 10, 2021.
First Draw vs. Second Draw
If you have not previously received a PPP loan, you may be eligible for First Draw loans. As the SBA website says, “First Draw PPP Loans can be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.” Several different kinds of criteria that may apply for these loans, so be sure to check if your shop is eligible.
If you have already received a PPP loan, your shop may be eligible for a Second Draw loan. If you qualify, your second loan will likely have similar terms to the first one. According to the SBA website, you may use these loans “to help fund payroll costs, including benefits…mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.” There are a few criteria to be eligible for a Second Draw loan, so check if your shop is eligible before applying. The window to apply for a Second Draw loan started January 13, 2021 and runs until March 31, 2021.
As of January 18, 2021, about 32% of loans had completed the forgiveness process. There are still millions of outstanding applications, so that percentage should continue to increase. COVID-19 hit small businesses hard, and your shop is likely feeling the effects. PPP loans are a great resource. In times like these, the only way through is together.
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