The gates are open for a second wave of forgivable loans meant to help small businesses keep their employees. Dollars from the Paycheck Protection Program (PPP) can also be used to help offset costs brought on by COVID-19. Bill Herrle heads the National Federation of Independent Business in Florida. He says the program will help small businesses stay open.
"It's much more of a targeted program this time, and I think the hope is that can ferret out some of the unwarranted PPP loans that we experienced in the first round, and that's good for us because we know that small businesses are the ones that need it the most," Herrle says.
During the PPP's first round, large corporations applied for loans, some returning the money after facing criticism for taking away dollars meant to go toward small businesses.
Now, during its second round, PPP applications are open for first and second draw loans. First draw is for those who weren't able to get a PPP loan at all. Second draw is for business owners who got a PPP loan and want another one. Michele Pellino with the First Commerce Credit Union says even if a business hasn't had its first program loan forgiven, it can still apply for a second one.
"So, you'll take a look at how you performed in [the] first quarter 2020. Then, you'll compare it to your first quarter of 2019, and if you see that you've had a reduction in revenue of at least 25%, you would be eligible," Pellino says.
Pellino says business owners can take that same comparison through all four quarters, and if there's a drop of at least 25% in profits, then they are eligible.
For those who are still waiting to have their first PPP loan forgiven, Michael Barrera with the Small Business Administration (SBA) says people need to make sure to have their paperwork ready.
"You work with your bankers throughout everything that you're doing. And that's one of the most biggest keys. And just have all your documentation ready. And answer any questions—if they ask you for more information, just get the information back to them as best that you can," Barrera says.
Barrera says there's no easy workaround for businesses to get their loans approved or faster. As of last week, the SBA says more than $1.1 million of the program's loans have been forgiven.
