New York Forward: Small Business Recovery Hub

The EIDL program which has been re-opened and is processing applications on a first-come, first-served basis.

• Loans with these terms and a 30 year repayment
• Apply here

We recommend you apply immediately.
The EIDL Advance Program ("EIDL grant") has ended as of July 11.

Update to PPP Loans (as of 12/21/2020)

CHANGES AFFECTING NEW AND EXISTING PPP LOANS

Covered period extended to March 31, 2021

1. The covered period for eligibility and use of PPP loan funds has been extended from December 31, 2020 to March 31, 2021. Borrowers would be permitted to spend PPP Funds on the following additional types of expenditures (and qualify for forgiveness for such expenditures): a. Covered operations expenditures, meaning payments for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses;
2. Covered property damage costs, meaning any cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation);
3. Covered supplier costs, meaning expenditures by the borrower to a supplier of goods, for the supply of goods that (i) are “essential to the operations of the business” at the time of such expenditure, and (ii) were purchased pursuant to contracts that were in effect prior to the covered loan period (or during the covered loan period, in the case of perishable goods); and
4. Covered worker protection expenditures, meaning any operating or capital expenditure that facilitates the adaptation of the borrower’s business activities to comply with HHS, CDC, or OSHA requirements (or equivalent state or local guidance) related to COVID-19 during the period between March 1, 2020 and the end of the national emergency declaration. The foregoing explicitly excludes the cost of any residential real property or intangible property.
5. Additional types of qualifying Payroll Costs. The types of group insurance premiums eligible for forgiveness would now include premiums for group life, disability, vision or dental insurance policies (in addition to group health insurance premiums).

Changes to Borrower Eligibility Requirements.

2. Title III enlarges the types of borrowers that would be eligible for a first draw and second draw of PPP loans, including certain (i) non-profit organizations organized under Section 501(c)(6) of the Internal Revenue Code (e.g., trade associations and chambers of commerce); (ii) tourism and hospitality marketing non-profit or governmental entities (defined as “destination marketing organizations” in the bill); (iii) newspaper and broadcasting companies (including non-profit organizations with NACIS codes beginning with 5151) that were previously ineligible to apply because of the traditional application of SBA affiliation rules; and (iv) housing cooperatives with less than 300 employees.

Changes to Tax Implications of PPP Funds.

2. PPP Expenses are deductible. Section 276 of Title III provides that “no deduction shall be denied [and] no tax attribute shall be reduced . . . by reason” of the exclusion of PPP funds from a borrower’s gross income. This change overrides prior IRS Guidance to the contrary and makes clear that business expenses paid for using PPP funds are deductible.
3. Tax Free Forgiveness of PPP Loan will not Reduce Tax Basis or Attributes. Title III further provides that “no tax attribute shall be reduced and no basis increase shall be denied, by reason of the exclusion” of PPP funds from a borrower’s gross income. In the case of a partnership, the partners may use the basis created by their PPP loan to deduct the costs that give rise to the forgiveness of the PPP loan because even if the PPP loan is forgiven the partner will be allocated an amount of tax-exempt income equal to such costs.
4. Confirmation that forgiveness is non-taxable. The bill further codifies the original intent of Congress that forgiveness of any PPP loan is not taxable.

Ability for PPP Borrowers to Request an Increase in Loan Amount.

2. Borrowers who have obtained PPP loans (including those that have returned all or part of them) are eligible to modify their loan amounts based on changes in regulations if it results in a larger loan amount for the borrower.
3. The SBA must release guidance within 17 days of enactment of Title III regarding procedures on seeking additional loan amounts.
4. Borrowers who have received forgiveness for existing PPP loans are not eligible to request a larger loan amount.

Clarification of Certain Terms and Interest Provisions.

2. Fee waivers, personal guarantee waivers, and deferral eligibility would attach for the life of the PPP loan (not just the “covered” period).
3. The interest rate for the portion of PPP loans that are not forgiven will be non-compounding and non-adjustable for all new PPP loans, including second PPP loans.
4. Section 319 of Title III prohibits PPP borrowers from using proceeds of the covered loan for lobbying activities, lobbying expenditures related to state or local campaigns, and expenditures to influence the enactment of legislation, appropriations, or regulations.

SOME BUSINESSES ELIGIBLE FOR SECOND ROUND OF PPP LOANS

The new legislation provides certain businesses with a “second draw” of PPP funds. While the rules applicable to second draw loans are generally similar to the rules applying to the PPP rules generally, borrowers must meet certain more restrictive criteria highlighted below.

Narrower Eligibility Requirements.

1. To be eligible, borrowers must have been eligible for the initial round of PPP loans (except as outlined below), and must have used (or will have used by the time of disbursement of the second draw loan) the full amount of the initial PPP loans;
2. Have less than 300 employees (together with affiliates); and
3. Be able to demonstrate a year-over-year decline of 25% or more gross receipts for any quarter in 2020 (as compared to the same quarter in 2019).

Calculating Loan Amounts for Second Loan Draws.

1. Loan amounts would be capped at $2 million.
2. Loan amounts are generally calculated by multiplying the average total monthly payroll costs for the one-year period prior to date the loan is made or calendar year 2019, at the election of the borrower, by 2.5.
3. Borrowers within the accommodation and food service industry (NAICS 72) are eligible to use a 3.5 multiplier instead of the 2.5 multiplier for calculation of loan amounts.
4. Seasonal employers may use any 12-week period between February 15, 2019 and February 15, 2020 for average monthly payroll costs to calculate loan amount.

Eligibility for Forgiveness.

1. Borrowers are eligible for forgiveness in an amount equal their payroll costs, covered mortgage, rent, utility payments, covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures.
2. To be eligible for full forgiveness, 60% of the loan must be spent on payroll costs (as is currently the case with first draw PPP loans).

Here is the “EZ” version of the PPP forgiveness application

Seven Key Amendments to the PPP

• Time Period for Use of Funds:
  • extension of the 8-week period -- when proceeds must be spent for loans to be forgiven -- to 24 weeks or through December 31.
  • The provision would apply to worker/wage reductions made from February 15 through 30 days after enactment of the CARES Act on March 27.
• Proceeds Used for Payroll:
  
  • reduction in payroll expenditure requirement to 60% from 75% to qualify for full loan forgiveness.
• Repayment Period for Unforgivable Loan:
  • The PPP loan will mature over 5 years instead of the current 2 year deadline set by the SBA. This provision will apply to loans issued after the measure is enacted - though borrowers and lenders could agree to extend existing loans too.
• Deferral Period (no payments required):
  • extended to 10 months after the loan forgiveness covered period (from 6 months)
• New Exceptions will be considered for borrowers that are unable to return to their original level of business activity due to covid-19 regulations.
• Repeal of a provision that barred companies with forgiven PPP loans from deferring their payroll tax payments
• Allowing borrowers to defer principal and interest payments on PPP loans until the SBA compensates lenders for any forgiven amounts, instead of the current six-month deferral period. Borrowers that don’t apply for forgiveness would be given at least 10 months after the program expires to start making payments.