Local Small Businesses Still Have Time To Apply For PPP-2

By Patric Hedlund, TME

Lebec, Lake of the Woods, Piñon Pines, Pine Mountain Club, Gorman, CA (Sunday, March 7, 2020 at 7:30 a.m.)—There is still time for small business owners with less than 20 employees—including LLCs, partnerships, sole proprietors and independent contractors—to apply for the Payroll Protection Program 2 (PPP-2). Nonprofits are also eligible, such as museums and other 501(c)3 entities. The Biden Administration created a special two-week window to assure that tiny businesses such as those in this rural Mountain Community are able to submit their applications first, before larger organizations can apply. The window to obtain priority treatment of your application closed at the end of Tuesday, March 9, but you have until March 31 to still submit an application. It is best to submit it as soon as possible. That may be easier to do than you think.

The Small Business Administration and California Bank & Trust (CBT) have established an application option which can even be submitted “document free” at first to hasten your ability to apply in time. That means you can whip through the online steps and press the “submit” button without compiling your complete documentation, so you have a place at the table before the bigger companies rush in to be served.

Sherri Dumin Timm is the manager of the local CBT bank branch. She can help you get to the application portal. You can also go to an online bank portal. Do gather your financial Profit and Loss (P&L) statement. You will need P&Ls for 2019 and 2020 to document that you have at least one fiscal quarter in 2020 (during the covid-19 quarantine recession) in which your business had revenues at least 25% lower than revenues of the same quarter in 2019.

The objective of the PPP is to keep people employed and to keep America’s small businesses operating through this pandemic recession, so we can all bounce back energetically when we are to the other side of the threat of covid-19.

Remember, you have until the end of March 31 to submit your application, but you want to do it as soon as possilbe.

You can get the gross 2019 payroll from your P&L. Divide by 12 for the average monthly payroll figure. That amount will be multiplied by 2.5 to calculate the loan/grant you are eligible for at this time, unless you are a hospitality business or restaurant. In that case, you will be eligible to use a 3.5 multiplier to determine the loan amount for which you are eligible.

Once you have your basic information gathered—including full name of your business, when it was founded, the North American Industry Code System (NAICS) code* for your type of business, the type of tax document you submit, the ID number for your business (such as your EIN), you can complete the application process in a couple of hours or less.

The PPP payments are technically considered a low interest loan until you submit documentation that shows you spent at least 60% of the funds on payroll. The other 40% balance can be allocated to pay specified business expenses such as rent, or mortgage interest, utilities, the cost of paying suppliers and several other items. Providing that documentation is known as “applying for forgiveness” —to ask that the loan be “forgiven,” so it will convert to a tax-free grant. The Small Business Administration will review the documentation and make that decision.

A new component of the Rescue Act that passed on Saturday afternoon, March 6, is that those convicted of a felony who have served their time and are small business owners, and those who may be in arrears on their student loan debt, are now also eligible to apply. —By Patric Hedlund, TME

*(The NAICS industry code guide can be found at https://www.census.gov/naics/)

This is part of the March 26, 2021 online edition of The Mountain Enterprise.

Have an opinion on this matter? We'd like to hear from you.