We're gathering the latest information about the financial relief programs that are currently available to small businesses. Bookmark this page to stay up-to-date with the latest news, guidance on how to apply for funding, and more!
You’ll need to apply for PPP forgiveness through the PPP lender that serviced your loan, not the SBA. Each PPP lender may open their forgiveness application portals at different times.
When your lender’s PPP forgiveness application is open to you, you should receive an email notifying you that you’re now able to submit an application. This email should also give directions on how to access your PPP forgiveness application. If you do not receive an email, or any other form of correspondence from your lender, we recommend reaching out to them directly.
Most lenders will have a dedicated webpage specifically for PPP forgiveness applications. This is a great resource to make sure you’re up to date with any news or changes regarding your application.
Once you’re able to apply for PPP forgiveness, we recommend doing so as soon as possible, as the processing stage can take time.
In order to be eligible for PPP forgiveness, your loan must be spent on specific eligible expenses only.
The following is a list of all expenses that are eligible:
- Payroll — salary, wage, vacation, parental, family, medical or sick leave, health benefits
Note: For sole proprietors, partnerships and independent contractors, you can use your funds to pay Owner Compensation Replacement instead
- Mortgage Interest — as long as the mortgage was signed before February 15, 2020
- Rent — as long as the lease agreement was in effect before February 15, 2020. (Click here for what’s included in rent)
- Utilities — as long as service began before February 15, 2020 (Click here for what’s included in utilities)
- Operations Expenditures — any software, cloud computing, or other human resources and accounting needs (like Bench)
- Property Damage Costs — any costs from damages due to public disturbances occurring in 2020 and not covered by insurance
- Supplier Costs — any purchase order or order of goods made prior to receiving a PPP loan, essential to operations
- Worker Protection Expenditures — any personal protection equipment or property improvements to remain COVID compliant from March 1, 2020 onwards
In addition to the restrictions on what expenses you can use your PPP funding on, there are a number of other program rules that you must follow in order to be eligible for full PPP forgiveness.
1. The 60/40 Rule
At least 60% of your loan must be used for payroll costs. Payments to independent contractors cannot be included in the payroll costs. Your forgivable amount will scale in proportion to the percentage of your loan that you spend on payroll, up to the total loan amount.
For example, if a business gets a $20,000 PPP loan, they would need to spend at least $12,000—60% of the loan—on payroll. However, they spend only $9,000 on payroll. This is 75% of the minimum payroll cost required for full forgiveness so their forgiveness amount is 75% of the loan. This means $15,000 of the $20,000 loan is forgiven, and they have to pay back the remaining $5,000.
Special note: If your business is a sole proprietorship, partnership, or you are an independent contractor, your Owner Compensation Replacement amount will count towards the 60% payroll requirement.
2. Staffing Requirements
You must maintain the number of employees on your payroll. This is because the purpose of the PPP loan is to maintain jobs.
Here is the calculation you can use to determine if you’ve met this requirement:
First, determine the average number of full-time equivalent employees you had during:
Take A and divide that by B1. Then take A and divide by B2. Use the larger number you obtain.
3. Pay Requirements
You must maintain at least 75% of each employee’s total salary.
This requirement applies to every employee that received less than $100,000 in annualized pay in 2019 or 2020 (depending on what year you used to calculate your PPP loan amount).
If the employee’s pay over the 24 weeks is less than 75% of the pay they received during the most recent quarter, the eligible amount for forgiveness will be reduced by the difference between their current pay and 75% of the original pay.
4. The Covered Period
Expenses eligible for forgiveness are only those that are incurred or paid for over the 8 to 24 week period, starting from the day you receive your PPP loan from your lender. This is not necessarily the date on which you signed your loan agreement.
You do not need to adjust your payroll schedule. All payroll that your employees incur over the 8 to 24 week period is eligible for forgiveness, even if the actual payout date falls outside the covered period.
Any expenses that fall outside your covered period will not be eligible for PPP forgiveness.
There are currently three different official SBA PPP forgiveness forms. These forms are most likely not what you will actually be filling out. Instead, your PPP lender will use these different application forms to create their online application process.
To understand which application form your PPP forgiveness application will be based on, you can check out this simple graphic below.
To learn more about how each forgiveness form works, you can check out the following Bench Blog articles:
There are several documents required for your PPP forgiveness application. With this in mind, it’s best to prepare this documentation ahead of your application to ensure that you have everything you need.
What documentation you will need to supply may depend on your business structure, as well as how you spent your loan. To best prepare your required documentation for your PPP forgiveness application, we recommend checking out this Bench Blog article.
Paying Yourself With PPP:
- Due to a rapid depletion of funds, the RRF was forced to close down on Monday, May 24, 2021.
- There is some speculation that more funds will be added to the RRF program, however, at this time there are no guarantees.
- Once we know more information about a possible RRF re-opening, we will update you here!
- As stated in our previous update, as of May 4, the SBA has closed all new PPP applications except for those through community financial institutions (CFIs).
- If you are interested in applying for the PPP through a CFI, we highly recommend you check out one of the following resources, which can help you better understand how CFIs work, and how to find a CFI that is appropriate for your business.
- SBA search tools for CFIs (includes CDCs, Microlenders, CDFIs and MDIs).
- Gusto: How CDFIs and MDIs Can Help Your Business Get a PPP Loan.
- Funds for the Paycheck Protection Program (PPP) unexpectedly ran out yesterday, May 4, 2021.
- The SBA PPP application portal is now closed to all new general applications.
- However, it appears that there is a reserve of $8 billion still available for prospective borrowers applying through community financial institutions (CFIs) only.
- There is also an additional $6 billion available to fund PPP applications that have currently been submitted to the SBA but have not yet been reviewed. If a client's application is at this stage, they may still be able to receive funding!
- This information is still developing, and we will update you as we learn more.
- The SBA has announced that they will begin accepting RRF applications on May 3, 2021 at 12:00PM EDT.
- Applicants can start registering as per this guide starting Friday April 30, 2021 at 9:00AM EDT.
- The administration has encouraged applicants to review additional resources such as the Program Guide, Frequently Asked Questions, and the Sample Application before applying.
For more information, check out this Bench Guide to the Restaurant Revitalization Fund.
- A new round of the California Relief Grant Program will be opening as of Wednesday, April 28 at 9:00AM PDT and will remain open through Tuesday, May 4 at 5:00PM PDT.
- Grant awards from $5,000 to $25,000 will be available to businesses to cover costs associated with re-opening business operations after being fully or partially closed due to state-mandated COVID-19 health and safety.
- Funds can be used to cover employee expenses including: payroll costs, health care benefits, paid sick, medical, or family leave, as well as insurance premiums inluding rent, utilities, mortgage principal and interest payments incurred before March 1, 2020.
Applicants will be able to apply online at the State of California website and through CalOSBA partners. Resources and application guide can be found here.
- As of today, April 26, 2021, the SBA has reopened the SVOG Application Portal.
- The SVOG program aims to offer emergency financial assistance to eligible venues affected by the COVID-19 pandemic. For more on SVOG eligibility, take a look at the SBA website.
- The SBA has also encouraged applicants to review additional resources such as this document checklist and this FAQ document before applying.
For more information on how to apply for the SVOG, check out this SBA User Guide!
- The RRF will offer financial relief to restaurants and other food and drink establishments impacted by the COVID-19 pandemic.
- Over the next two weeks, the SBA will launch a pilot period to troubleshoot the application process. Following the pilot, the SBA will announce the official application launch date for the public.
- For the first 21-days, the SBA will be prioritizing awarding grants to eligible businesses that are: women-owned and controlled, small businesses owned and controlled by veterans, or socially and economically disadvantaged small businesses.
- Applicants will be able to apply online through the SBA website, telephonically at (844) 279-8898 or through a recognized SBA Restaurant Partner.
For more information, check out the Bench Guide to the Restaurant Revitalization Fund.
Targeted Advance EIDL Reevaluation Request
- If your Targeted EIDL Advance application was denied, you can now send an email to TargetedAdvanceReevaluation@sba.gov to get your application reevaluated.
- For exact instructions on how to get your Targeted EIDL Advance Grant Application reevaluated, please check out this SBA page.
- Please note that there is a different process if you would like your EIDL loan application reconsidered.
Disaster Loan Deferral Period Extended!
- On March 15th, 2021, the SBA extended the deferral period for all disaster loans, including the Economic Injury Disaster Loan (EIDL), until 2022.
- More specifically, all SBA disaster loans received in 2020 will have their first payment due date extended from 12 months to 24 months from the date of the note.
- And, all SBA disaster loans received in 2021 will have their first payment due date extended from 12 months to 18 months from the date of the note.
- For the full details you can check out the official notice from the SBA.
- Yesterday, President Biden officially signed the PPP Extension Bill into Law. This means that you will now have until May 31, 2021, to submit an application, and, the SBA will have until June 31 to process applications.
- However, even though the deadline has been extended, we still encourage clients to apply as soon as possible so they don't miss out on this funding.
- As always, if you have any questions about the PPP or any other financial relief options, please reach out to your Bench Bookkeeper in-app, and they will ensure that you get the support you need!
- On March 25, the US Senate passed a bill to extend the deadline for PPP loan applications from March 31, 2021, to May 31, 2021. The Bill also gives the SBA an extra month, to June 31, 2021, to process these applications.
- Please note, this bill will still need to be signed into law by President Biden before the PPP extension can be implemented.
- Guidance: We recommend that despite this extension, to best ensure your chance of receiving funding you should submit your PPP application as soon as possible.
- For any questions about PPP eligibility, or assistance with applying, please reach out directly to your Bench Bookkeeper and they will ensure that you get the support you need!
- On March 3, the SBA announced new PPP guidance which allows for Schedule C filers applying for a loan to base it off of their gross profit instead of net profit.
- Previously, it was thought that this change would only impact new PPP applicants.
- However, this week, the SBA has released further guidance through an FAQ that explains how Schedule C filers who have already submitted an application, have been approved, or have already received their funding, may still be able to benefit from this new calculation!
- For the full details on how you may be able to increase your PPP loan amount, you can check out FAQ #66 from the SBA or reach out to your Bench Bookkeeper for assistance.
- We've written a blog article summarizing everything you need to know about the $1.9 trillion American Rescue Plan Act: The American Rescue Plan - A Summary For Small Businesses.
- Have questions? Your Bench bookkeeper works alongside our Client Research Team to get the answers to even the most complex relief questions. Start a conversation today!
- As of yesterday, Thursday, March 11th, President Biden has signed the $1.9 trillion American Rescue Plan into law.
- We have learned that in addition to the $7.25 billion in funding allotted to the Paycheck Protection Program, the plan also includes an additional $15 billion for the Targeted Economic Injury Disaster Loan Advance program (EIDL).
- Next week, lawmakers in the House of Representatives are set to vote on a bipartisan bill that will extend the deadline for the Paycheck Protection Program.
- If passed, the bill will extend the current application deadline from March 31, 2021, to May 31, 2021, providing small businesses with an additional two months to apply for their loan.
- Note: this extension of the PPP is NOT guaranteed. To best ensure your chance of receiving funding we recommend applying as soon as possible.
- Current US government guidance states that the PPP is not considered taxable income for the business, regardless of whether the funds have been forgiven or not.
- With the passing of a $908B Coronavirus Stimulus Package in late December 2020, all PPP expenses were also determined to be tax-deductible.
- What is still not entirely clear, is how those claiming PPP as Owner Compensation Replacement (OCR) will be taxed.
- Note: At this time, we do believe that these OCR amounts may be taxable, and PPP borrowers should be prepared to pay taxes on these amount.
- As of today, Wednesday, March 10th, the American Rescue Plan has officially passed through the US Senate and House of Representatives.
- President Biden has stated that he intends to sign the bill into law this Friday, March 12th.
- It has been speculated that once signed into law, the up to $1,400 direct stimulus checks included in the bill, will start to be distributed within a number of days. This will mainly be done through direct deposit and by mail.
- We have also learned that the Restaurant Revitalization Fund will be administered through the Small Business Administration (SBA). We expect the SBA to release more details about this fund shortly after the bill is signed into law.
- On Saturday, March 6th the US Senate passed the $1.9T American Rescue Plan. It is expected that President Biden will likely sign the bill into law by mid-March.
- The Rescue Plan is a wide-sweeping bill that is relevant to American Small Businesses, this includes:
- This information is still developing, and we ensure to provide our clients with the most updated information as it becomes available.
On March 3rd, 2021, the SBA released an interim final rule which results in various changes to the PPP program. Here's a summary of these changes:
1.) PPP Application Changes for Sole Proprietors
- Sole proprietors, without payroll, will now be able to calculate their loan amount using gross profit, which is line 7 on their Schedule C. Sole proprietors who run payroll are able to use gross profit but must deduct the expenses reported on lines 14, 19 and 26 of their Schedule C.
- Maximum PPP amount for sole proprietors is now $29,167 for those with an NAICS code ending in 72, and $20,833 for all other borrowers.
- Unfortunately, a borrower whose PPP loan has already been approved as of the effective date of this rule cannot increase its PPP loan amount based on the new calculation methodology.
- The SBA has developed new Borrower Application Forms for use by borrowers that are Schedule C filers and elect to calculate their loan amount using gross income:
SBA Form 2483-C will be used by borrowers applying for First Draw PPP Loans
SBA Form 2483-SD-C will be used by borrowers applying for Second Draw PPP Loans
2.) PPP Forgiveness Changes for Sole Proprietors
- For those now applying for the PPP using gross profit, owner compensation replacement (OCR) will now be replaced with proprietor expenses which will NOT be for the full loan amount when using gross income.
- Proprietor expenses encompass an owner’s business expenses and own compensation but do not include employee payroll costs.
For borrowers who have no employees, proprietor expenses equal gross income.
For borrowers who have employees, proprietor expenses equal the difference between gross income and employee payroll costs.
3.) General PPP Eligibility Changes
- As previously announced by the Biden Administration on February 22, 2021, The SBA has also eliminated two exclusionary criteria. Now business owners who have defaulted student loans or have non-fraud-related felony records can apply for the PPP
- Starting Wednesday, February 24, 2021, the SBA will establish a 14-day exclusive PPP loan application period for businesses and nonprofits with less than 20 employees.
- With this update from President Biden, it appears that the loan calculation formula used by sole proprietors may change, however, we are still waiting for official guidance from the SBA.
- The administration has also eliminated two exclusionary criteria. Now, business owners who have defaulted student loans or have non-fraud related felony records can apply for the PPP.
- Non-citizen US residents (green card holders or visa holders) can now apply for the PPP using Individual TaxPayer Identification Number (ITIN).
- Some PPP lenders have closed their PPP forgiveness application temporarily to focus on funding new PPP loans.
- Reminder that the SBA has not set a deadline to apply for forgiveness, once your lender is accepting forgiveness applications, they will let you know.
- On January 24th, the SBA reported that a total of $400,580 in PPP funding has been approved. This means that 12% of total PPP funds have been used.
- With this in mind, we still recommend that you apply for the PPP as soon as possible in order to increase your chances of receiving funding.
- The SBA is working to ensure fair and equitable access to its programs, and Bench will continue to update the information as soon as new data is released.
- Our PPP lending partner BlueVine has now opened up their applications to all borrower types. Click HERE to start your PPP application with BlueVine today.
- Jan 15, 2021 Recorded Webinar: How To Apply For Your Second PPP Loan
- In this webinar, we take a deep dive into getting a Second PPP loan and guide you through the PPP application process. Additionally, we cover the latest financial relief updates and offer an extended Q&A session with our Financial Relief Research team.
- Jan 12, 2021 Recorded Webinar: Second Stimulus Updates for PPP, EIDL, & Unemployment
- In this webinar, we provide a general overview of the latest financial relief updates and changes as a result of the second stimulus package. We cover PPP, EIDL, and PUA and offer an extended Q&A session with our Financial Relief Research team.
- With the passing of the new COVID-19 Financial Relief Bill, PPP applications will be reopening for both first time and returning PPP borrowers. We expect applications will reopen around mid January 2021.
- Late last night the US Congress passed a $900B financial relief stimulus bill.
- The bill includes another round of PPP, unemployment benefits top-up, direct stimulus checks, and a reinstatement of the EIDL advance grant program.
- This bill will also make several changes to the rules and eligibility requirements of the PPP, including making all PPP expenses tax-deductible.
- On November 18th, 2020 the US Department of the Treasury and IRS released guidance confirming that the PPP loan will not be considered taxable income.
- Unfortunately, the US Department of the Treasury and IRS still have not clarified how PPP borrowers claiming owner compensation replacement will be taxed.
- If you applied for the PPP using a Schedule C, Schedule K-1 or 1099 MISC forms, then you are able to claim owner compensation replacement (OCR).
- At this time there is no clear IRS guidance on tax implications for PPP borrowers claiming OCR for their loans.
- Some individuals believe that forgiven OCR amounts will not be taxed at all, however, this is only based on assumptions and not real IRS guidance.
- As we wait for more IRS guidance on this topic, it is important to consider that you may end up having to pay income taxes on your PPP amount you claimed as OCR.
- If your PPP lender is accepting forgiveness applications, we recommend applying for PPP forgiveness once your PPP lender has implemented the appropriate form for your application type (either the 3508, 3508EZ or 3508s).
- However, if you are not ready to apply for PPP forgiveness yet, you still have lots of time as all PPP payments are deferred until 10 months after your covered period ends
- On Sunday, December 27th President Trump signed the new COVID-19 financial relief bill into law.