Finance & Career
Because of the Financial Help for Businesses Consolidated Appropriations Act, small businesses (500 employees or less) and other eligible entities can start processing the paperwork for a First Draw application for the Paycheck Protection Program (PPP) starting January 11.
These loans can provide a source of financial help from the negative impacts of the COVID-19 pandemic. The proceeds of the PPP loan can be used to make payroll for employees, some 10-99 workers, and pay for a business’s mortgage interest, rent, utilities, and some other expenses. The PPP loans are forgivable if the terms are met according to the Small Business Administration (SBA) guidelines. There are different loan amounts and specific details that apply to different types of small businesses and other entities as outlined by the SBA. The SBA has a frequently asked questions web page that provides more information for small businesses.
First Draw Applications
This new legislation simplified the First Draw application for businesses and entities that qualify. For small businesses that have not applied, visit the SBA website for a summary of the First Draw application program under this new legislation.
Second Draw Applications
If a business previously received a PPP loan, they can apply for a Second Draw loan if they meet the requirements. One requirement is whether or not the business suffered a 25 percent loss of income between quarters in 2019 and 2020. Generally, this requirement does not apply to First Draw applicants and those who started a business after March of 2020. The Second Draw application can be found also on the SBA website.
In Alabama, there is an excellent source of help for small businesses. The Small Business Development Center network (SBDC) has business advisers located across Alabama. You can go to http://asbdc.org/office-locations/ to find a center near you.