Understanding the CARES Act and 2021’s PPP Loans

In response to the COVID-19 pandemic, the federal government passed and signed the CARES Act. The relief bill — which stands for Coronavirus Aid, Relief, and Economic Security — is the largest of its kind in modern U.S. history. Though it provides different forms of financial relief for small businesses, the Paycheck Protection Program (PPP) may be the most impactful.

Recently, Congress approved a new round of PPP loans totaling $285 billion. The application window will open in January 2021.

Funds for this PPP round are limited and therefore may only be available for a few weeks. So, time is of the essence for restaurant owners. To streamline your application process, Slice recommends Prime Commercial Lending, a partner set up to quickly and accurately handle small business loan applications. 

As your trusted technology and financial partner, we are here to inform you of  game-changing programs like PPP and assist with execution.  Before you apply, here’s a brief overview of PPP and how Prime Commercial Lending can potentially assist you in securing a loan.       

Disclaimer: This post is not intended to provide explicit financial advice or guidance. In other words, its intent is to simply highlight the forms of relief that may be available to small businesses. 

For more details about Prime Commercial Lending, please visit their website.   

What are the qualifications for a PPP loan?

First-time PPP borrowers with less than 500 employees and second-time PPP borrowers with less than 300 employees may be eligible. 

However, second-time borrowers may be required to “demonstrate a revenue reduction of 25% in any quarter of 2020.”  

Note: If you applied for a previous PPP round, but did not receive a loan, you are in the “first-time” category.

Can I get my PPP loan forgiven?

Yes, but only by following specific guidelines.

How can a service like Prime Commercial Lending help me get a PPP loan?

Prime Commercial Lending assists with everything from the application process and underwriting to support, servicing, and assistance with loan forgiveness. They have a team of over 500 staff members ready to help. Additional details can be found on their website.

Slice explored a number of lending solutions for the latest round of PPP. On the whole, Prime Commercial Lending was the clear choice. A nationally-recognized leader for over 20 years, Prime Commercial has financed over $1 billion of transactions for businesses of all sizes. In the last PPP round alone, Prime Commercial Lending underwrote approximately $500M in loans. In addition, 42% of those loans went to restaurants.  

What documents are needed for PPP?

Whether applying directly or working with a partner like Prime Commercial Lending, you will need to gather:

  • Financials and Bank Statements: For revenue reduction support 
  • Payroll Records: To confirm your business was in operation on 2/15/20 
  • Business Documents: Including articles of incorporation and W9
  • Personal Information: Including valid identification for all owners
  • Tax Returns and Statements: Primarily for verification, if needed

What can PPP loans be used for?

As with previous rounds, the loan can be used for payroll costs, mortgage, rent and utility payments, and interest on other debt obligations. 

In addition, the latest round of PPP can also be used for:

  • Certain operational expenses
  • Property damage costs
  • Listed supplier costs
  • Covered worker protection expenses

What is the interest rate for a PPP loan?

PPP loans carry a small 1% interest rate. 

What if I don’t get a PPP loan?

The CARES Act also offers tax relief opportunities for those who do not qualify for a PPP loan. This includes employers who provided sick leave to employees during the pandemic. While paid leave is no longer mandatory, businesses can receive tax credits for leave provided through March 31, 2021.  

For a complete assessment of your overall eligibility, we suggest consulting with a tax professional.  

Times are tough. But, you can’t stop pizza. For more tools, resources, and inspiration, visit our Coronavirus Resource Center.

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