PPP 2021 Summary - LiftFund

LiftFund has partnered with Lendio to bring you Paycheck Protection Program (PPP)

We know it’s been a challenging year, but business owners can access the new stimulus package with confidence and a sigh of relief in this uncertain time.

With the launch of the new Paycheck Protection Program, we’re providing first-class service and immediate access to the PPP program in partnership with Lendio.

LiftFund and Lendio are trusted resources in micro and small business financing and bring community lending and online lending together for you to be successful in accessing PPP.

Who Can Apply?

Eligible small entities, that together with their affiliates (if applicable), have 500 or fewer employees—including nonprofits, veteran organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors.
Businesses must be operating as of February 15,2020. Business has not been permanently closed.
Employee size for PPP 1st Draw: Businesses with less than 500 employees; Entities with more than 500 employees in certain industries that meet SBA’s alternative size standard or SBA’s size standards for those industries can also apply.
Employee Size for PPP 2nd Draw: Businesses with 300 or fewer employees; for NAICS code businesses starting with 72 (Accommodation & Food Services Industry) 300 or fewer per physical location.

What Can PPP Funds Be Used For?

The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan. Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

About the PPP Product:

Loans up to $250,000
Interest Rate: 1%
Term: 5 years
Collateral and Personal Guarantee are not required. The SBA provides 100% guarantee on the PPP loan.
LiftFund is authorized to provide the PPP loan in the following states: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, New Mexico, Oklahoma, South Carolina, Tennessee, and Texas

About the Application Process:

As you begin the application process the SBA Form will populate for LiftFund to submit to SBA, so please complete the online application and upload the documents required in the program.
Lendio will confirm and validate your business and financial information.
If you are a LiftFund PPP borrower seeking a second draw, please be ready with all your documents to submit through Lendio. Lendio will need all your business and financial information to assist us in maximizing your 2nd PPP request, so please be ready.

What is Different About the PPP Program?

At least 60% of the proceeds are spent on payroll costs.

Two types of PPP products:

1st draw for businesses applying for the PPP for the first-time
2nd draw PPP for businesses who received PPP the first-round

What documents do I need to proceed in receiving a PPP loan?

First Draw Loan Required Document List:

SBA Form 2483 Paycheck Protection Program Borrower Application Form revised Jan 8, 2021; click here to access form
Business Entity Legal documents
For sole proprietorships and sole member LLC:
- 2019 Personal Tax Return containing 2019 Schedule C.
For Partnerships:
- 2019 1065 Partnership tax Return Containing all schedule K1s
If business has employees:
- 2019 Forms 941 for all quarters;
- 2019 Form 944
- Payroll Processor Records (for 12 months)
Personal Documents for primary owners/agent:
- Personal ID;
- Proof of personal address

Second Draw Loan Required Document List:

SBA Form 2483-SD Paycheck Protection program Second Draw Borrower Application Form; click here to access form
Same Entity, Personal and Payroll documents used in 1st Draw Loan
Gross receipts for comparing losses:
- Quarterly: receipts for 2019 quarter and receipts for same quarter in 2020;
- For business not operating in 2019, receipts for first quarter of 2020 and receipts for third or fourth quarter for comparison;
- For applicants selecting annual comparison, provide 2019 tax returns and 2020 tax returns
Gross receipts include all revenue in whatever form received or accrued, including revenue from sales of product or services, interest, dividends, rents, royalties, fees, or commissions reduced by returns and allowances. Generally, receipts are considered “total income” plus “cost of goods sold”. Gross receipts does not include taxes collected.

Please visit here to learn more on the SBA PPP website as programming may evolve during the program. Click here.

PPP Legislation Summary

Congress passed the new COVID relief bill last night and it will be signed into law soon. $284 billion has been included to fund another round of PPP Loans 2021. We assisted thousands of clients this year and we’re now accepting Pre-Registrations for the next round

Here’s what we know about this next round of PPP:

It will be open to those who received PPP loan money in the first rounds if they can demonstrate a 25% reduction in sales in any quarter of 2020 compared to the same quarter of 2019
It will be open to first time borrowers
The loan amount for most borrowers will be equal to 2.5x monthly payroll expenses
The loan amount for restaurants and hotels will be equal to 3.5x monthly payroll expenses
Loan forgiveness will be simplified for loans up to $150,000
Expenses paid with PPP funds are now tax deductible.
Funds can be spent between 8 weeks to 24 weeks after loan origination
Spending restrictions will be loosened. In addition to payroll, rent and utilities, funds can now also be spent on items such as PPE and to fix property damage due to “public disturbances; with a Minimum 60% for payroll expenses.

WHY PRE-REGISTER FOR THE PPP LOAN?

Just like the first rounds, availability of funds is on a “first come, first served” basis.
Registering with us does not restrict your ability in any way to also apply elsewhere.
Our lenders funded $25 million in PPP loans in the first rounds – Almost all of them to clients without an existing lending relationship.
We’re familiar with the loan terms and application process and small businesses and can provide support.

PPP LOAN TERMS:

We’ll be providing further updates as we have them in the next couple of weeks including the launch of the new PPP round.

$284 billion is allocated for this next round. By our estimates, that should cover less than 20% of all small businesses — This is a “first come, first serve” process and we’re advising all of our clients to submit their pre-registration as quickly as possible.

If we can answer any questions, please don’t hesitate to reach out anytime to [email protected] or call 800.920.0585.