Congress has been in a heated discussion over the possibility of a second stimulus package and small businesses have been holding out in hopes for another round of the Paycheck Protection Program (PPP). PPP is a government loan that assists small businesses by helping them pay for their overhead and if the business meets the criteria they would be eligible for forgiveness on the loan. The stipulation for the PPP Forgiveness is that small businesses, with 500 employees or less are eligible for a loan equal to two-and-a-half times their monthly cost in payroll, and must use 60% of their loan on their payroll.
Economic Injury Disaster Loan VS Paycheck Protection Program Loan
Are you having trouble understanding the difference between the EIDL and PPP? Are you not sure whether you can apply and receive both types of loans? Let’s take a look.
Economic Injury Disaster Loan VS Paycheck Protection Program Loan
Are you having trouble understanding the difference between the EIDL and PPP? Are you not sure whether you can apply and receive both types of loans? Let’s take a look.
The deadline to apply for the PPP was August 8, 2020 and banks are now starting the forgiveness process. Although it may be in your best interest to hold off from applying for forgiveness due to the ambiguity around the next stimulus package. There have been talks that the next stimulus package may include a smaller amount of PPP or that there would be more restrictions on who would qualify for the second round of PPP but it is still unclear. There have been two bank lobbying organizations asking Congress for a $150,000 blanket PPP forgiveness. The benefits of blanket forgiveness would mean that the loans would be more like grants for businesses. Because of the uncertainty, many banks have asked small businesses to slow down on the forgiveness applications since no one knows the repercussions of what could possibly happen in the near future or if Congress decides to change the requirements for PPP and PPP Forgiveness.
So, what do you do now? Well, we’re here to help! Valor CPAs offers a multitude of accounting services from comprehensive financial accounting to accounting advisory. Because we get it, we’re a small business too! Let us help and serve you through these uncertain times by assisting you with any of your immediate tax needs or questions about how to prepare for the upcoming tax season! The deadline for small businesses to file their taxes is just around the corner. If you’re a partnership or an S-Corp the upcoming deadline is September 15, 2020 and if you’re an individual, trust or corporation the upcoming deadline is October 15, 2020. We’re here to help if you have any questions or concerns on these deadlines!
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