MAJOR PPP Updates: Potential Second Round and Simplified Forgiveness Application Coming Soon?

Uncategorized Jul 31, 2020

Hey entrepreneurs! 

One of the most common questions I get asked about the PPP is will we be able to apply for a second round of PPP loans? 

It looks like we might be VERY close to getting that answer.

This week, details about a potential second round of PPP loans started to surface along with news about a super-simplified forgiveness process.

On our July 30 Business Money Made Simple Weekly livecast, Carlos and I covered the details of the proposal but here's the tl;dr for you...


The Continuing Small Business Recovery and Paycheck Protection Program Act was introduced by Senators Marco Rubio and Susan Collins in a series of bills that  make up the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act. The legislation is in the early stages but it looks like there's overwhelming bipartisan support - so we're kind of expecting this to get fast tracked into law.

Here are the four big takeaways from the proposed legislation: 

1. A second loan from the Paycheck Protection Program:
* Eligible entities must demonstrate at least a 50 percent reduction in gross receipts in the first or second quarter of 2020 relative to the same 2019 quarter and employ not more than 300 employees. In other words, you'll have to prove that your business took a MASSIVE hit in 2020.
* In general, borrowers may receive a loan amount of up to 2.5 times average total monthly payroll costs in the one year prior to the loan, up to $2 million.

2. Simplified PPP Forgiveness Application:
For loans under $150,000, the borrowers are not required to submit to the lender documentation required by the CARES Act, but instead must attest to a good faith effort to comply with Paycheck Protection Program loan requirements and retain relevant records for three years. In other words, it sounds like you'll sign a document that says that you promise that you tried your best to comply with the stipulations of the program and you'll then be automatically forgiven in full.

3. Borrowers can elect a covered period ending at a point of the borrower’s choosing between 8 weeks after origination and December 31, 2020:
* Figuring out coverage periods was one of the most challenging issues that we've seen borrowers struggle with.  Under the proposed legislation, you'd be able to pick an 8 week period that best suits your use case.


4. Expanded Forgivable Expenses:  
* Covered operations expenditures - Payment for any software, cloud computing, and other human resources and accounting needs.
* Property damage costs - Costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance.
* Covered supplier costs - Expenditures to a supplier pursuant to a contract for goods in effect prior to February 15, 2020 that are essential to the recipient’s current operations.
* Covered worker protection expenditure - Personal protective equipment and adaptive investments to help a loan recipient comply with federal health and safety guidelines related to COVID-19 during the period between March 1, 2020, and December 31, 2020.

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