Is It Possible To Get A Second PPP Loan?

PPP Loan

Many business owners have said that the money they have received from a PPP loan has been exhausted or will soon be exhausted. As shutdowns continue, more funding is needed to keep businesses afloat during the pandemic.

The new bill, the P4 act will allow small businesses (those will 100 employees or less) to be eligible for a second loan. To apply for the second loan, they must have lost half of their usual revenue because of the pandemic and that they have already or will soon exhaust their PPP loan. The hope is that this bill will give some additional financial aid to small businesses and help them stay afloat.

“We are facing an uncertain future. We do not know how long it will take to eradicate coronavirus and return to normal. People and businesses who lost their income during the pandemic need help to survive. Now more than ever, politicians must work together to create a corona aid relief bill to ease the financial suffering of their people,” says Brad Nakase, who is one of the best personal lawyer in California and awarded the prestigious “American Institute of Trial Lawyer’s 2020 Litigator of the Year.”

One of the co-sponsors of the bill, Senator Ben Cardin, has said that this bill is vital in allowing the economy to recover. It is a key part of Congress’s $2 trillion program CARES which hopes to support the economy through coronavirus. The PPP program has taken $659 billion of the CARES money, issuing eight-week payroll loans which are forgivable if businesses use the money as per guidelines. If not, the loan will be 1% interest and to be repaid within five years.

The P4 bill was created as the original PPP program saw shutdown as a maximum of eight weeks and so only budgeted for that. With a longer shutdown and reopening restrictions, businesses are in dire need of additional financial aid.

The lesser of 20% of PPP funds or $25 billion will be put aside for P4 loans, especially for businesses in rural communities or with less than ten employees. The Small Business Association will use its data to give guidance on which businesses should be prioritized.

The P4 fund is specifically for small businesses; therefore, hospitality businesses with multiple locations will only receive a maximum of $2 million. Publicly traded companies cannot apply for P4 funding.

Congress sees this as an important program because the more businesses they can save, the more jobs there will be for people post-pandemic. Therefore to make sure the economy recovers as quickly as possible, the small businesses, the ones loyal to their workers, need to be supported. The P4 bill is the first step in updating the CARES Act for a pandemic that has dragged on longer than expected.

As with the PPP loan requirements, small businesses must show that the loan is necessary to cover payroll costs. A portion may go towards expenses approved by the legislation such as rent, mortgage, and utilities.

Kevin Kuhlman from the National Federation of Independent Businesses has made the point that the 50% revenue loss is too high. That businesses with a small profit margin because of high fixed costs will be struggling at a 30% revenue loss.