Financial Relief as the Pandemic Continues: Round 2 PPP Loans Meet Small Business Needs

 

Small businesses continue to struggle as COVID-19 takes its toll. While no business is immune, it’s the smallest who face the largest hurdles. Recognizing the need to provide more financial relief, the government released a second round of Paycheck Protection Program (PPP) loans in January. This round has similarities to the first round but specifically targets small businesses most affected and includes some changes to loan caps, usage and loan forgiveness.

The expanded eligibility criteria, delivered through a wider scope of lenders and community resources and programs like microloans mean that more of the $284 billion will enable businesses like those with fewer than 10 employees applying for less than $25,000, live venues and non-profit organizations previously excluded from PPP loan programs can benefit from this round of funding.

Repeat borrowers can qualify for a second draw loan during this new round of funding.  In addition to eligibility criteria outlined below, these businesses have to have used or intend to use their first round funds during the applicable covered period.. New borrowers must meet the eligibility requirements of first draw under the second round of funding. Both groups of borrowers are eligible for loan forgiveness when certain criteria are met.

PPP is a complex loan program that has already undergone guidance changes from the SBA. Although much was learned during the first round of application and borrowing, understanding the requirements for this round will make the application, borrowing and forgiveness process more efficient for borrowers and lenders. The relationship you have with your bank or financial institution is the best bet for staying up to date on the process, requirements, approval and loan forgiveness.

Eligibility

For first and second draw borrowers, round two is designed to allocate funds to the hardest hit and smallest businesses and organizations. This wider range of eligible entities includes businesses, sole proprietors, independent contractors, self-employed individuals, certain 501(c)(6) organizations, seasonal businesses that meet timing and gross receipt guidelines, tribal organizations, veteran’s groups, faith-based organizations with less than 150 employees and housing cooperatives that employ less than 300 people. Publicly traded companies are not eligible for PPP loans.

Businesses applying for the second draw are eligible to apply for one second draw up to 2.5-times their average monthly payroll or 3.5-times for the food and hospitality industry, up to $2 million per borrower. The business must have:

  • 300 or fewer employees or less than 300 employees per location if the business operates multiple locations
  • Used or will use the full amount of their round one PPP loan before the second draw is disbursed
  • Show a 25 percent gross revenue decline in any 2020 quarter when compared with the same 2019 quarter
  • Been in operation before February 15, 2020 and not be permanently closed

To be eligible for a first draw, the business must not have received a round one PPP loan and employ fewer than 500 employees. The salary calculation for first draw borrowers is the same 2.5 times average payroll, with a capped loan amount of $10 million. Exceptions may apply to restaurants and hospitality businesses.

There are nuances and some exceptions within these general eligibility criteria for both second and first draw borrowers. Lenders and other financial professionals can help navigate the complexities to determine eligibility.

PPP Loan Terms

PPP loans carry terms favorable for small businesses looking for financial relief. For maximum flexibility, borrowers may choose the length of the covered period. Beginning when the loan is disbursed, the covered period is the time during which at least 60% of loan proceeds must be used for payroll. In addition, PPP loans:

  • Carry a 1% interest rate
  • May not have fees charged by lenders or the government
  • Have a five-year maturity
  • Do not require collateral or personal guarantees

Loan payments will be deferred for borrowers who apply for loan forgiveness until the SBA remits the borrower's loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness.

Loan Forgiveness

As in the first round, borrowers may qualify for loan forgiveness using a 60/40 cost allocation between payroll and non-payroll costs.  Eligible costs include some of the original costs and a few expanded categories.   Payroll costs, mortgage, rent, utility payments, covered operations expenditures such as software and accounting costs, covered property damage costs due to public disturbance and not covered by insurance, covered supplier costs such as contracts, purchase orders, or orders for goods essential to the recipient’s operations, and covered worker protection expenditures and adaptive investments incurred during the covered period are some of the high level costs that can be included in the forgiveness calculation.

One of the improvements made with this round of funding and forgiveness is that businesses with PPP loans less than $150,000 will complete a new simplified forgiveness one-page application instead of a lengthy and complicated form.

Get Started Now

It can take time to gather documentation and submit a PPP loan application. Starting now will ensure businesses meet the March 31 deadline. Many banks are eager to help small businesses thrive in their communities. These institutions can provide guidance and checklists and tools to ensure an application includes the required documentation, certifications and signatures. Submitting a complete application is the secret to a smooth borrowing experience. Incomplete information creates log jams and can result in loan request rejections.

March 31 is the second round PPP loan application deadline. Reach out to your financial institutions sooner than later to take advantage of a second or first draw loan to help your business.

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  • Next up: Four Reasons Why ADA Website Compliance is Critical in 2021

    Four Reasons Why ADA Website Compliance is Critical in 2021

    It has always been important to have a business website that is accessible to all people, but the global pandemic has taken this need up a notch. Read on to find out more and discover ways you can ensure your website is ADA compliant.

     

    Accessibility is a cornerstone feature of the internet that levels the playing field for everyone around the globe. When the internet meets this goal, it opens doors to people with a diverse range of sight, hearing, movement, and cognitive abilities. It also provides them with increased opportunities, including education, jobs, and online shopping for goods.

    However, when poorly designed websites, applications, technologies, or tools are created, enormous barriers that prevent people from accessing the internet can be present. For instance, people living with physical challenges, like blindness or hearing loss, may have issues interacting with a site if it doesn’t include the right accessibility enhancements.

    You may be surprised to know that accessibility can also help those without disabilities. For instance, older people may have difficulty reading smaller fonts with different colors. Other individuals may have issues with slow connections, bad screens, and ‘temporary’ disabilities, such as an inability to read due to blurry vision caused by migraine headaches.

    And, what’s good for the client is good for the business. Websites that incorporate accessibility have been found to have reduced maintenance costs and increased audience reach.

    Four Reasons Your Business Should Have Accessible Websites

    Are you still undecided about how ADA website compliance can benefit your business? Here are four reasons why your company should make your website accessible for everyone.

    1. Reduced Litigation Risks

    Businesses must ensure their sites comply with Titles II and III of the Americans with Disabilities Act (ADA). Under the ADA’s State and Local Governments statute (Title II), these entities must protect qualified individuals with disabilities from discrimination based on disability in services, programs, and activities provided by governmental agencies. 

    Some legal eagles have interpreted Title III of the ADA to define websites as “places of public accommodation.” This interpretation has placed website owners at increased risk for legal action if their websites are inaccessible to people with disabilities. Lawsuits related to web accessibility are currently on the rise in the United States. And due to the COVID-19 pandemic, experts expect litigation to skyrocket in 2020 as businesses race to build new technology to handle a glut of online ordering, communication, and additional digital services.

    Several major companies have already faced litigation because their sites don’t comply with ADA standards, including Dominos, Burger King, Red Lobster, T.G.I. Friday’s, Safeway, Winn-Dixie, Amazon and Blue Apron.

    2. Improved Search Engine Rankings

    A second reason companies should build accessible sites is to improve their search engine rankings online. When sites follow the best standards and practices of search engine optimization, they are optimizing your site and mobile apps for accessibility.

    Check out these SEO tactics that support ADA website compliance.

    Image Alt-Tags and Captions: These should have clear descriptions of content about images that allow screen readers to identify and read images properly. It also gives search engine bots indications of what an image is about and if it has a URL attached.

    Video Transcription and Tags: Do you have multimedia on your website? To meet ADA website compliance, you must have a readable transcript for audio-only and video-only media. Spend a few minutes to make sure your text is accurate. You should also add video titles, keywords, and descriptive text that help search engines and users find your content more easily.

    PDF: Small businesses should ensure that all PDF content is accessible by following Adobe Acrobat’s guide.

    RELATED: 5 reasons to invest in SEO for your business.

    Title-tags: These allow users to identify whether the information on your webpage is relevant to their needs. It also allows Google to crawl it quickly and determine how the page should appear in its search results.

    Link-anchor-text: These should be descriptive. Text or buttons that only say “Click Here” are not ideal since they don’t communicate what the result would be. It’s recommended that you use a copy of the link to tell users and search engines what your site links to.

    On-site sitemaps, table of contents, and breadcrumbs: These simple sitemaps contain links to all major sections and pages of your website. They can allow your visitors to understand the contents of your website.

    3. Increased Sales and Conversions

    Another benefit that accessible websites provide to businesses is increasing their website sales and conversions. When you design your website for ADA website compliance, you’ll attract a large segment of buyers that can significantly increase your website traffic. In 2019, disabled Americans spent more than $200 billion online in discretionary spending. With COVID-19, online sales and orders have exploded.

    Accessible websites also improve the overall user experience (UX) for all of your users, not just people with disabilities. For instance, adding accessibility features such as keyboard-based navigation, search by voice, increased content readability improves your site’s flow. Adding accessible elements also allows search engines to discover your website more easily since you can add semantics, micro data, and ARIA tags to communicate the structure and purpose of your site.

    4. Improved Corporate Responsibility

    Creating ADA-compliant websites also improves your corporate social responsibility. According to the Nielsen Norman Group, which conducts research-based user experience, consumers expect companies to be clear, authentic, and transparent. They compare corporate content with third-party reviews to develop their opinions about companies before they do business with them.

    The Nielsen Norman Group also found that companies that donate back to their communities are also seen as more benevolent and responsible than businesses that don’t make the same efforts. They love companies that care about people and the environment. 

    RELATED: Read more by Nachum Langsner.

    ADA Website Compliance is Achievable

    Does your business need an accessible website that helps others within your community and improves your market reach? LocalBizGuru has professionals that can build a beautiful, ADA-compliant website design that reaches all of your customers, or audit and repair your current website to achieve ADA website compliance. In fact, full ADA and WCAG compliance and certification can be achieved in 48 hours and monitored 24/7, and maintained thereafter!

    Learn more about our web accessibility solution—or to schedule an appointment, contact us today. Mention 'COSE' for an exclusive discount to wave the first year's $250 set up fee.

    And, to read more, check out a more extensive LocalBizGuru blog post on this topic.

    Nachum Langsner is the Co-Founder & CMO of LocalBizGuru, a full-service digital marketing agency based in Cleveland, OH. He has over 10+ years of experience in the SEO industry and is a frequent presenter and instructor of digital marketing and SEO seminars for entrepreneurs and small business owners in the Greater Cleveland area for organizations such as COSE, Jumpstart, the Better Business Bureau, Score and the Ohio SBDC at CSU.  

     
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  • Next up: GCP Advocates for Critical Federal Relief Before Year’s End

    GCP Advocates for Critical Federal Relief Before Year’s End

     

    The Greater Cleveland Partnership (GCP) and our 12,000 business members continue to express our strong support for key programs and provisions found within various proposals of coronavirus relief packages that have been debated and brought forward in Washington.  Broadband affordability and connectivity, support for our health care institutions, and investments to help minority businesses and communities are among the many important issues GCP continues to highlight and fight for.

    While those issues are not the only policy points that are of importance to our members, flexibility for small businesses that have participated in the Paycheck Protection Program is another issue at the top of the list of our priorities. GCP – and its small business division the Council of Smaller Enterprises – urge our elected leaders to support legislative action that provides tax deductions for ordinary business expenses and other tax incidents not be affected by the exclusion from gross income of amounts related to loan forgiveness received in response to the coronavirus pandemic. Our members’ grave concerns on this issue stems from a related Internal Revenue Service (IRS) ruling and clarifying guidance that would directly, negatively impact the northeast Ohio business community.  

    Stay tuned for additional information on how federal activity may directly impact your business and the region.

     
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  • Next up: GCP Hosts Panel to Promote Diversity in Commercial Real Estate

    GCP Hosts Panel to Promote Diversity in Commercial Real Estate

     

    Over 40 people interested in commercial real estate attended What’s Happening in Cleveland: A Conversation on Diversity & Inclusion in Commercial Real Estate on October 24. Hosted at GCP and presented by the Real Estate Associate Program (Project REAP), attendees enjoyed refreshments while Ken McIntyre, the project’s executive director, spoke. He noted that the program serves as a bridge between talented minority professionals and commercial real estate companies looking for talent, through educating those professionals on the business side of the industry. Angele Robinson-Gaylord, President of North American Real Estate at IKEA, was the Keynote speaker. Graduating Project REAP in 2009, Robinson-Gaylord detailed her experience transitioning from practicing law to working in commercial real estate. As a woman of color, she noted how graduating Project REAP gave her the tools to succeed in an industry historically under-represented by people that look like her.

    Robinson-Gaylord then sat on a panel to discuss the current state of Greater Cleveland’s commercial real estate industry. Joining her was Michael Elliot (Program Manager of Capital Access Fund, National Development Council), Christopher Nance (Director of Construction Diversity & Inclusion Program, GCP), and Shonna White (Real Estate Manager, CBRE). After answering questions from moderator David Browning (Managing Director, CBRE), the panel opened to questions from the floor.  Questions pertained to the potential impact our local colleges and universities can have on minority participation in the industry, and how we as a region can make young minorities feel like real estate is a profession that they can and want to pursue. The evening ended with networking, as attendees had the chance to speak personally with the panel members.

    For information about an upcoming REAP Academy being planned for 2020 in Cleveland, please contact Vince Adamus at 216-592-2258 or vadamus@gcpartnership.com. Learn additional information regarding the nationwide REAP program.

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  • Next up: GCP Joins COVID Coalition, Governor Urges Determination

    GCP Joins COVID Coalition, Governor Urges Determination

     

    Last week the GCP Board of Directors officially approved of the organization’s inclusion and participation in the Coalition to Stop the Spread.  GCP is among hundreds of Ohio organizations that are coming together as part of the Coalition to Stop the Spread

    We all have committed to mobilize our workforces, our customers, our vendors and our friends in advocating for steps we know are effective in fighting back against COVID-19. 

    Check out a message directly from Ohio Governor Mike DeWine thanking GCP members for their resilience.  

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  • Next up: GCP Members Participate in Statewide Roundtable on Women and Minority Businesses

    GCP Members Participate in Statewide Roundtable on Women and Minority Businesses

     

    Last week, GCP women and minority-owned business members participated in a roundtable discussion event hosted by state Senator Nickie Antonio. The discussion focused on the unique concerns of women and minority-owned businesses. It also served as a starting point to help strategize potential legislative solutions.

    Women and minority business owners from across the state of Ohio convened for the meeting, providing valuable feedback to Ohio’s lawmakers in order to support the growth of female and minority businesses. GCP has remained committed to advancing business growth among a diversity of stakeholders. In its latest public policy agenda, GCP called for the review of administrative rules for various state programs that support growing minority and diverse ownership of small businesses.

    Conversations with members who experience obstacles to growth first-hand are a critical part of engaging the state legislature to pass comprehensive solutions.

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