This year has undoubtedly been strenuous for small businesses and startups. As we move into the New Year we must remain persistent, creative, and resourceful.
We want to make sure that every startup and small business we work alongside is seeking all the help and reaping all the benefits available to them.
On December 27, 2020, President Trump signed a new Coronavirus relief bill (often being referred to as Stimulus Package 2) that will provide $284 billion in loans for small businesses. Compared to the first act in March, there are a few new rules and regulations that may impact your ability to apply.
The bill will give the Small Business Administration 10 days to implement the new rules and we are now halfway through this waiting period. Until then, any startup questioning their eligibility should turn to their lenders for guidance.
Here is what we know so far:
In order to be eligible your business must:
- Be a small business, nonprofit organization, veterans organization, Tribal business concerns, and small agricultural cooperatives that meet the SBA size standards.
- Be sole proprietors, self-employed individuals, or independent contractors.
- Employee less than or equal to 300 employees.
- Have gross receipts have to be 25% less than the same quarter in 2019.
- Use the full amount of the first PPP loan.
- New: Certain small news organizations, destination marketing organizations, housing cooperatives, and 501(c)(6) nonprofits may now also be eligible.
- New: The business must have at least a 25% reduction in revenues in at least one quarter in 2020 when compared to previous quarters (Read more here)
You are likely not eligible if:
- You are a publicly-traded company.
- An investor/VC has the ability to block actions by a startup’s Board of Directors, the investor and startup are considered affiliates.
We are still learning more about this bill and its ability to help our startups. If you have any questions about your eligibility or the bill itself please contact your personal lender and read more here. At this time, we expect these loans to be available in early January.
Wishing you a happy and healthy New Year!
Ryan Vet & The Newchip Team