State Representative Will Guzzardi, in partnership with The Dancing Accountant Nancy McClelland, hosted a Facebook Live event on the second round of Paycheck Protection Program (PPP) loans last week. According to the U.S. Small Business Administration, “The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on payroll.”
“Tonight, we are going to talk about PPP loans,” said Guzzardi, who represents the 39th District. “This was a program that was initiated at the beginning of the pandemic by Congress to support small business who were experiencing disruption by the coronavirus pandemic. In the more recent legislative session by Congress this winter, they created a second round of PPP loans. We wanted to provide an opportunity for business owners and community members to learn more about the PPP loans — how this differs from the first round, how to apply and all that good stuff.”
The new round of PPP began on Jan. 11, and applications are open through the end of next month. Emily Melbye, Guzzardi’s chief of staff, said, “The round 2 PPP Loan deadline is March 31, but it’s possible that funds will run out before then. So it’s important for folks to apply as soon as they can.” Small businesses can apply through a bank or other financial institution but not directly to the U.S. Small Business Administration.
“It’s a real honor to be here and to share this information with small businesses out there who may not have the resources to work with a professional accountant,” McClelland said. She explained that PPP provides forgivable loans that are essentially tax-free grants intended to primarily cover payroll and some overhead costs.
The initial round of PPP made for “a miserable summer, to be honest,” McClelland said. It began April 3, 2020, and ran out of funding in 13 days. “Businesses with more resources, like in-house CPAs and existing relationships with bankers, initially received most of the money,” she said. The program was replenished on April 26 and ran through Aug. 8. “People were worried that if they took this loan and things turned out not to be as bad as they thought it might be, then were they going to get in trouble? The answer we now know was ‘no.’ but it made a lot of people scared. There was also a lot of fear of being left with a loan that cannot be repaid.”
This second round of PPP has “much clearer” rules, and the program is “much more beneficial for small businesses,” McClelland said.
“If you are a small business and you are hurting and you have not applied for PPP1, this should be first on your list of things to do.” McClelland advised to “research state, local and private grants for your specific location and industry” and to look at grants from “big companies trying to position themselves as small business friendly,” along with other SBA loan programs. She advised business owners to reach out to a local Chamber of Commerce and representative’s office for suggestions.
To be eligible for PPP 1 and 2, business must have been in operation on Feb. 15, 2020, and must certify the they they need the money. “You do not need to be suffering the most in order to be suffering, so if you need this money, please come take it,” McClelland said.
She explained what counts as payroll: “anything on which you pay ‘payroll taxes’ or ‘Social Security and Medicare taxes.’” She ran through the application process. Second-round PPP borrowers must show at least a 25% reduction in gross revenue. Potential borrowers must provide IRS documentation that establishes their business and fill out an SBA application. As for where to apply, McClelland suggested that local banks and community lending institutions have had “higher satisfaction rates” than large banks. She also referenced the SBA’s Lender Match Tool for businesses without lender relationships. McClelland’s suggested lender is Biz2Credit.
Guzzardi said that the video on Facebook live and YouTube will be dubbed in Spanish soon. “It makes me very happy to support the small business community in home in Logan Square,” McClelland said.
Helpful links, McClelland’s PowerPoint presentation and video of the webinar are located here: https://www.repguzzardi.com/updates-2/how-to-apply-for-a-ppp-loan?fbclid=IwAR2AJJntGLWpIl_2dzPvxnxAUsDN0grWTwwxNqy3chHHvx8qHBy-AMRd1Uk
Featured photo: Tom Vlodek