The US Congress finally passed the second round of the economic stimulus bill this week. For small businesses, the most important thing is that the$ 2840 billion, Reserved for the second round of PPP (Salary Protection Program) for small businesses across the United States to apply for use.At present, the bill still needs to take the final step: waiting for President Trump's signature to become a reality.
Although many restaurant owners are familiar with the rules of PPP loans,About the first round of PPP related information,Please read here.But the second round of PPP loans under the new law will have many major changes, such asThis round of loans can only be applied by companies with 300 employees or less (the first round requirement is 500 or less), Other adjustmentsCurrently known:
Eligible catering companies will receive higher loans
The maximum amount of each loan in the second round of PPP is US$200 million, The loan amount that a small business can apply for depends on the businessMultiply the average monthly salary in 2019 by 2.5 times.In other words, PPP loans are designed to fund small businesses’ salary expenditures for 2.5 months.
The new bill provides special cases for restaurants and food companies, which will provide the catering industry with loans for an average monthly salary of 3.5 months.For example, if your small business has an average monthly salary of US$2019 in 100,000, you will be eligible to apply for US$250,000.If you are a restaurant or other qualified food business, then you are eligible to apply for up to $350,000.
You can apply for the second round of PPP only if your income drops by 25% or more
Unlike the first round of PPP loans,Small businesses must prove that their income has fallen by 25% or more this year before they can apply for the second round of PPP loans. Small businesses must compare quarterly revenue in 2020 with the first, second, and third quarters of 2019.Only when compared with the same quarter in 2019, at least one quarter of 2020 has a revenue drop of 25% in order to qualify for the second round of applications.
New loan use scope
To apply for the second round of PPP, the previous round of PPP loans must have been used up or planned to be used.Similar to the first round of rules, small businesses need to use up the loan within 24 weeks of receiving it, and can use the funds for employee salaries, rent and mortgage expenses.The new bill increases the scope of loan use, and the second round of PPP can also be used, such asOperating expenses, the cost of protecting employees from the new crown virus, and property damageand many more.
The 60/40 principle remains unchanged
Like the first round of PPP loans, the second round of PPP loans can also be repaid.But to apply for exemption, you must follow the same rules:60% or more of the loan needs to be used to pay employees' salaries.
PPP loan exemption and partial tax exemption
The new bill stipulates thatAll the existing PPP loans and the second round of PPP loans will receive part of the exempt amount and do not need to pay taxes.In addition, the expenses covered by the amount of PPP loan exemption,Previously, the income could not be deducted from the income when filing taxes. After the new bill is passed, it is equivalent to giving small business owners double tax benefits.
The bill also stipulates that EIDL grants and EIDL Advance are also in most casesThere is no need to pay taxes if there is no need to repay.
Simplified repayment process for loan applications under US$15
The new bill requiresSBA must simplify the application for repayment of small businesses with less than $15 in PPP loans for this round.The simplified application must be on one page, including loan information and a certificate from the business owner, proving that the funds have been used correctly and can be repaid, and do not include calculations or other additional information.
Once President Trump signs the bill, the Treasury Department and SBA will refine the content of the bill and provide more detailed explanations and guidelines for loan applications.We will closely follow up the progress of the new round of PPP and welcome the attention of practitioners in the Chinese catering industry in North America!
References:
https://www.entrepreneur.com/article/362143
*Disclaimer: This article strives to ensure that the information provided is accurate, but does not guarantee the accuracy, completeness and timeliness of such information, does not constitute any legal, accounting, tax or other professional advice, and is only for transmission and reference.
"North American Meal Exam News" is the sister number of the North American head gastronomy new media "Eating Food Team". It aims to serve North American Chinese food and beverage practitioners and is committed to building a professional service platform for the North American food and beverage industry. We hope to promote the two-way exchange of Chinese and American catering culture, support Chinese food to go overseas, and serve overseas brands in China.
