Paycheck Protection Program Loan Update - January 2021

Congress approved an additional $285 billion for Paycheck Protection Program (PPP) loans for small businesses. Should you apply? Did you receive the first round, and you're wondering if you should apply again? And, what are the changes?

I'm going to answer your questions and more. Stay tune:

PPP Highlights:

First-time borrowers. In general, borrowers can have no more than 500 employees, and their business must have been in operation as of February 15, 2020. The first loan can be up to 2.5 times the business' average monthly payroll costs, up to a $10 million loan maximum.

Second-time borrowers. Businesses can apply for a second PPP loan if they've spent or expect to spend the full amount of their first PPP loan before receiving funding for the second loan. In general, borrowers can have no more than 300 employees. The second loan can be up to 2.5 times the business' average monthly payroll costs, up to a $2 million loan maximum.

SBA will roll out the PPP program in phases: 

January 11 (First Loan) January 13 (Second loan)

How To Prepare

Complete the application at the SBA's website or apply online with your lender.

Loan Details

SBA will forgive loans if all employee retention criteria are met and the funds are used for eligible expenses.

  • PPP loans have an interest rate of 1%.
  • Loans issued before June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years.
  • Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower's loan forgiveness amount to the lender. 
  • If a borrower does not apply for loan forgiveness, payments are deferred ten months after the end of the covered period for the borrower's loan forgiveness (either eight weeks or 24 weeks).
  • No collateral or personal guarantees are required.
  • Neither the government nor lenders will charge small businesses any fees.

Key Pointers - As a virtual CFO, there are a few key takeaways I want you to be mindful of as you outline your options with the PPP.

  • All loans will undergo an automated review, and all loans of $2 million or more will undergo a manual review
  • Keep the PPP money in a separate business checking account and use it strictly for PPP eligible expenses.
  • Eligible expenses are payroll cost, business mortgage interest payments, rent payment, and business utilities. 
  • Maintain an accurate, reliable accounting system with receipts and source documents to prove each charge

If you need assistance with maintaining accurate, reliable accounting records, click the link to schedule a Discovery Session today contacting our office at 1.888.966.7438.

Article Source

The SBA website 

Octavia Conner Virtual CFO

About Octavia Conner

As the CEO of Say Yes To Profits an outsourced accounting firm, Octavia Conner is an accountant and business manager who handles the finances of 6- & 7-figure businesses and celebrities. Her mission is to prevent the struggle of entrepreneurship and enable clients to have more money then they know what to do with it while paying zero in taxes. To date, over 90% of her clients have scaled their business between 30% and 350% within 12-months and saved over 55% in taxes. Octavia is a wife and mother of four who enjoys spending her spare time with family, reading and watching action movies. For more information, visit

 © 2021 Say Yes To Profits

3645 Marketplace Blvd

Suite 130-357

Atlanta, GA 30344

Phone: 1.888.966.7438