PPP 2

[ILLMAS]

Can someone confirm this for me, if a business sales did not drop by more than 25% they don't qualify?  Or they do if this the first PPP loan to them?  I did an analysis for one of my client and their sales did not drop by more than 25% but they still want to apply.

[Lion EA]

For the 1st PPP, that was not a requirement.

For PPP2, income needed to drop 25% or more year-over-year OR one quarter-over-quarter. I just helped a client whose income dropped 23%, and his first three quarters dropped no more than 23%. But his 4Q2020 income dropped 40% from 4Q2019, and his loan is in his bank account. Work with your client's bank to see how they want it presented.

[ILLMAS]

Q1 up by 21%

Q2 down by 23%

Q3 up by 42%

Q4 up by 39%

Overall sales increased by $200K

Ok so for PPP2 that requirement remains the same even if it's the TP first request correct?

[Lee B]

Exactly, I prepared a 2nd PPP Loan application last Friday for a client whose 2nd quarter revenue decline 25.02 % who qualified.

Their loan is now approved, just needs to be esigned for funds to be disbursed.

If this is their first PPP Loan, they shouldn't have a problem, they just to state that it's an economic necessity.

Since the second quarter declined by more than 20 %, they alternatively qualify for the Employee Retention Credit,

which is messy and confusing.

[Lion EA]

If it's the TP first request for any PPP Loan, then it's PPP1 with its own set of requirements.

If the TP already had a PPP Loan forgiven or likely to be forgiven and he's requesting a second loan, now it's PPP2 and has the 25% drop in income requirement.

Make sure he uses the correct (1st draw or PPP2) application form from his bank.