Plymouth small businesses need to apply now for PPP2 loans from SBA
4 min readThinking about applying for funds for your small business in the second round of the Paycheck Protection Program? Amy Naples offers this advice: “Do it now.”
“I recommend that you act quickly,” said the executive director of the Plymouth Area Chamber of Commerce. “There is a lot less money in this round. If your business truly needs funding, if you are truly struggling, do it now.”
The U.S. Small Business Administration rolled out “PPP2” – as the plan is colloquially called – last week with $284 billion through the federal Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. That’s $65 billion less than offered in the first round last year.
In round two, about $7 billion is available for Massachusetts small businesses hit hard by the COVID-19 pandemic. That money is being sourced to community banks and other financial institutions so area companies can apply for loans to keep their workforce on the job during the resultant financial crisis. Extra effort is being made to ensure minority, underserved, veteran and women-owned businesses have access to these funds.
Even though there is less money in the pot this time, getting funding should be easier than the last round, especially if you applied the first time. The loans can be used to fund payroll costs, including benefits, and may also be used for mortgage interest, rent, utilities and worker protection costs related to COVID-19, as well as certain supplier expenses for operations.
“It was like the Wild West the first time,” said Robert H. Nelson, Massachusetts district director for the SBA. “We ran out of money. We’re more prepared now, so it should be more controlled this time. We have a good team in Massachusetts ready to assist small businesses with any questions or concerns.”
One of the more intriguing elements of PPP2 is the loan-forgiveness aspect. Eligible small businesses may be able to avoid paying back these funds if they meet certain requirements. For first-time borrowers, that means employee and compensation levels must be maintained, loan proceeds are spent on payroll costs and other eligible expenses, and at least 60 percent of the proceeds are spent on payroll costs.
For second-time participants to be eligible for loan forgiveness, they must have used the full amount of the first draw only for authorized uses, have no more than 300 employees and had at least a 25-percent reduction in gross receipts between comparable quarters in 2019 and 2020.
“The 25-percent loss is crucial,” Naples said. “Make sure you have accurate accounting records of any expenses related to COVID-19, including sanitation services, purchases disinfecting supplies, plexiglass screens, personal protective equipment – anything like that. A lot of restaurants, retailers and gyms in the Plymouth area will likely qualify.”
New in PPP2 is the Shuttered Venue Operators Grant program, which includes $15 billion in funding. The Spire Center for Performing Arts, Memorial Hall and other live venue operations may be eligible for the grants.
Qualified applicants can request amounts equal to 45 percent of gross earned revenue. A total of $2 billion is reserved for eligible applications with up to 50 full-time employees. Venues must not have received any other funding under the first or second phases of PPP.
“This is a brand-new grant program,” Nelson said. “Museums, entertainment venues, theatrical producers, movie theaters and more may be eligible to apply. But this has to be the first time they are getting money through the Paycheck Protection Program. They can’t do both.”
Of course, the devil is in the details. Filing for this funding requires significant paperwork, including proof of payment and losses. Naples advises businesses to consult their accountants and check with the banks about all aspects of receiving PPP2 loans.
“You know your business,” she said. “Make sure you ask questions. Consult with authoritative sources. Don’t go into this with the belief that ‘I heard I could do this or that.’ Make sure you have the proper documentation. Businesses have to bear the burden of proof, so make sure everything is in order.”
Naples said the Chamber is available to assist businesses with any issues regarding funding. Check out the COVID-19 Toolkit at plymouthchamber.com/featured/covid-19-toolkit/ or contact her directly at [email protected] or 508-830-1620.
The Plymouth Area Chamber of Commerce also administers the Plymouth One Fund to support local businesses. Donations can be made at https://plymouthchamber.com/plymouth-1-fund.
As companies prepare applications, there are bound to be questions. Nelson suggested potential borrowers first review the SBA’s frequently asked questions about the Paycheck Protection Program at www.sba.gov/document/support-faq-lenders-borrowers.
If still puzzled, then contact the Massachusetts District office in Boston at 617-565-5590. Nelson said small businesses can also contact him directly at 617-565-5561, 617-595 7251 or [email protected].
“We are available to answer questions and help you with the application process,” he said. “Apply now.”
Deadline for applications is March 31. As Amy Naples said, “Do it now.”
For more information about the Paycheck Protection Program, visit www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program.
