government relief, ppp, eidl
Sean Salas
By: seansalas
Read in 10 minutes

Evaluate Your Government Relief Options Now

On December 20th, Congress approved a new stimulus package of $900 billion so that Americans can receive the financial help they need to survive the COVID-19 pandemic. 

Important Update:

On December 27, President Trump signed the bill to approve the Second Round of coronavirus relief. While there aren’t any set dates for when the stimulus will be available, it’s a fact it’s coming.

Banks and financial institutions across the United States will have to get ready to begin processing and disbursing cash to small businesses that qualify for two main programs: Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). In this Second Round:

  • The PPP has $284 billion to distribute
  • The EIDL has $20 billion

It’s expected the funds associated with these two programs will be depleted as fast as the First Round. So you have no time to waste! We strongly encourage you to first evaluate if you’re eligible for one of these programs and take immediate action to apply whenever applications open. 

The Second Round of the stimulus package will distribute the remaining funds in the following programs:

  • A new round of stimulus checks
  • Enhanced jobless benefits
  • Vaccines for anyone who needs them
  • Rental assistance and an eviction moratorium
  • Child care assistance
  • Increased Supplemental Nutrition Assistance Program and child nutrition benefits
  • Broadband access to help Americans connect remotely

The Stimulus Package: the Second Round

What’s new on the Second Round? Keep reading to learn how this proposed bill could look like (if the president approves it):

Businesses Stimulus

The Second Round of the PPP has some updates and improvements compared to the First Round. These changes can further help businesses that couldn’t access the first round and smaller businesses.

  •  $15 billion have been allocated specifically for live venues, independent movie theaters, and cultural institutions.
  • The eligibility will be expanded so that smaller businesses and restaurants can access the help they need.
  • Now, nonprofits and local newspapers, TV, and radio broadcasters will be able to apply, too.

If you want to learn more detail about government aid for businesses (the PPP and the EIDL), you’ll find extra information about these programs down below.

Stimulus Checks

Americans will receive Economic Impact Payments.

  • For individuals: a payment of $600 (making up to $75,000 per year)
  • For couples: a payment of $1,200 (making up to $150,000 per year)
  • Child dependents: a payment of $600 for each one

This means a family of four will receive $2,400 in direct payments.

An improvement from the First Round is that this one has a provision, retroactive to the CARES Act, that expands these direct payments to mixed-status households. What does this mean? Immigrant families across America will also receive this financial aid.

Unemployment Stimulus

The Second round has enhanced jobless benefits. increases to 50 the max number of weeks an individual may claim unemployment benefits.

Workers with unemployment benefits will receive an additional weekly $300 through March 14, 2021.

Additionally, the coverage has been expanded to:

  • the self-employed
  • gig workers,
  • others in non-traditional employment

Other Personal and Health Stimulus Programs

  • $28 billion to ensure the vaccine is available to anyone who needs it
  • $25 billion for rental assistance and an eviction moratorium
  • $13 billion for increased Supplemental Nutrition Assistance Program and child nutrition benefits
  • $10 billion for child care assistance
  • $7 billion to bolster broadband access to help Americans connect remotely during the pandemic

What are the PPP and the EIDL?

  • PPP is a forgivable loan offered mainly by banks, credit unions, and community-based lenders. If the Second Round is the same as the First one, your business will be eligible to receive up to 250% of your monthly payroll costs during a specified period.  Sole proprietors or independent contractors are also eligible but the calculation of loan amount is based on wage, commission, income, or net earnings. The loan is forgivable up to 8 weeks of payroll and other costs, and remaining loan payments are deferred for up to 6 months.
  • EIDL is a loan offered to businesses that can prove they’ve been materially affected by COVID-19. This loan is disbursed directly by the SBA.  The loan includes a non-refundable cash advance of $10,000 funded within 3 days.

Banknotes of the United States of America and a protective mask against the virus. World economic crisis associated with coronovirus. concept: coronavirus SBA Small Business Relief Programs, : payment protection program

If you want to learn more about the PPP program, click here.

Banknotes of the United States of America and a protective mask against the virus. World economic crisis associated with coronovirus. concept: coronavirus SBA Small Business Relief Programs, Economic Injury Disaster Loans

If you want to learn more about the EIDL program, click here.

Who is eligible?

While the requirements for the Second Round haven’t been revealed, we can assume they’ll be similar (or even the same) as the First Round:

  • Businesses and entities must have been in operation on dates that the SBA will specify when the requirements are revealed
  • Less than 300 employees
  • Eligible Parties
    • Small Businesses, including sole proprietorships, with or without employees
    • Independent contractors
    • Cooperatives and employee owned businesses
    • Private non-profits
    • Tribal small businesses
  • For PPP, banks, credit unions, and SBA lenders are applying additional restrictions. Most banks are limiting PPP eligibility to their existing clients.

Can I apply for both programs?

  • Yes. However, you cannot use the funds of the loans for the same purpose.
  • If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP loan.
  • If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. Proceeds from any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan.

How can I apply?

Keep in mind that, as of today, the SBA has not revealed requirements, application dates, or what the process will be. You can expect that the requirements will be similar to those of the First Round.

Paycheck Protection Program (PPP)

  • The best chance for you to get a loan is to act QUICKLY and contact your bank ASAP so they can give you further guidance.
  • If your bank couldn’t offer PPP loans in the First Round, make sure to check again, the Second Round will be different.
  • If you’re sure your bank or credit union is not taking PPP apps, the best option is to contact a local community bank in your area
  • Review the PPP application forms so you can understand it and get prepared
  • Documents you should probably start gathering:
    • 2019 and 2020 Payroll — total payroll for full-year 2019 adnd 2020 by employee, as reported to the IRS
    • 2019 and 2020 Independent Contractor Costs — Listing of 1099’s-MISC for 2019 and 2020 independent contractors, by person

Economic Injury Disaster Loans (EIDL)

  • Review the First Round’s short application on the SBA website to familiarize with it

Important

You cannot submit multiple PPP applications at the same time and can only be funded for one PPP loan. Each application can be completed in a matter of minutes, and loans are “first come, first serve”. If you’re eligible, don’t waste any time and apply as soon as applications are up!

The bottom line

We sincerely recommend that you apply for any government assistance immediately. But if you don’t qualify, for whatever reason, we recommend you look for other forms of aid so that your small business can survive this economic downturn.

An option is a small business loan. At Camino Financial, our motto is “No business left behind,” we work every day, and especially now, with this in mind. If we can help you, we will.

We can help your business weather this storm. Let us be your partner during this difficult time. 

Click here to apply for a Camino Financial business loan.

Read more articles and find some more helpful resources to help you during this crisis:

COVID-19: Small Business Resources, coronavirus, Camino financial

COVID-19: Small Business Resources

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