On December 27th, President Trump signed the $900 Billion Stimulus Package into law that introduced a second round of PPP loans (PPP2). Most healthcare practices that were required to close their offices last spring should qualify for PPP2. Same goes for self-employed practitioners, practice owners who didn’t apply for PPP Round 1, and those practitioners who returned the PPP Loan they received.
To qualify for PPP2, practice owners must:
- Be able to demonstrate a 25% decline in revenue for any calendar quarter during 2020 as compared with the same quarter of 2019
- Special rules apply to practices not yet open in 2019
- Have fully spent or plan to fully spend the funds received from PPP Round 1
- Have been open prior to 2/15/20 and are still currently open for business
To see if you meet the 25% decline in revenue, log onto your QuickBooks Online, click on Reports, then Profit and Loss Comparison. Change the dates to 4/1/20-6/30/20 and pull down on the Compare to another period box.
In that dialog box, click on the Previous Year, $ Change, and % Change, then click on Run Report to see if the revenue is down by more than 25% for the quarter.
Just as with PPP1, eligible practices should receive 2.5 times the average monthly qualifying payroll costs. The amount received then needs to be spent on certain allowable payroll and facility costs over the 24-week Covered Period starting when the funds are received.
Expect the SBA to issue guidance about PPP2 by 1/13/21, which is 17 days from the date that Trump singed the Stimulus package into law. You might also reach out to your lender who helped you with PPP Round 1 to get the PPP2 ball rolling. The deadline to apply for your PPP2 loan appears to be 3/31/21.
Additional Resources:
For more information about PPP Round 2, please read these articles:
COVID-19 relief bill addresses key PPP issues – Journal of Accountancy
The Small Business Owner’s Guide to the Paycheck Protection Program: Round 2 | Gusto