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Payroll Protection Program (PPP):

Getting a Fair Share Resources

Payroll Protection Program (PPP): Getting a Fair Share Resources

WHAT?

Tools and information to help more small businesses, especially Black, Brown, and women entrepreneurs, participate in the Payroll Protection Program, the federal government’s Small Business Administration forgivable loan relief program.

WHY?

Together, we can assist Hamilton County neighborhoods by helping Black, Brown, and women business owners get their fair share of PPP loans. Nationally and locally, in the first round of PPP last year, minority- and women-owned businesses were disproportionately left out of the race for federal aid to recover from the impacts of the pandemic, even as technical assistance providers and lenders were overwhelmed by those seeking help. As a result, many of our neighborhood business districts and commercial corridors are suffering.  Fortunately, Cincinnati Minority Business Collaborative (CMBC) members, lenders, and other small business and community development organizations are ready to help.

 

SOURCES

Special thanks to the following for their contributions to PPP: Getting a Fair Share: Eddie Koen, President & CEO, ULGSO,  Kala Gibson, EVP and Head of Business Banking, Fifth Third Bank; Michael Shepherd, Senior Vice President, National SBA Director, Fifth Third Bank; Jilson Daniels, Vice President, Economic Equity, The Port; and Dr. Rea Waldon, CMBC Coordinator.

Frequently asked questions

Is the PPP loan the same as the SBA loan?


  1. The Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) are pandemic recovery programs authorized by the US Congress and administered by the US Small Business Administration (SBA). PPP loans can reach $10 million and are 100% forgivable if used for approved and properly documented expenses. Commercial banks and community finance institutions are accepting applications now and SBA approval must be secured by March 31, 2021. EIDL loans can reach $2 million and must be repaid in full; applications will be taken until 12/21/2021 or until the funds run out.

  2. The SBA offers a variety of other small business loans through commercial banks, certified community lenders unrelated to pandemic recovery. They are loans that must be repaid, but offer terms or features intended to help small busines start and grow.




I understand that companies that received a PPP loan in the first round last year may also receive a second PPP loan now. Does the loan have to completed by the same lender?


There are no limitations to the second round. If you want to go to a different lender, you can do that. You may need to supply the lender with your existing SBA Loan Number. Use the SBA application for the second draw (SBA Form 2483 SD)




Do you anticipate financial institutions prioritizing their existing clients over other clients? That seems to be what a lot of small businesses faced in the first round.


May banks do prioritize their own customers. This may depend on each institution’s process, however, the documentation required and the onboarding process for the loan is the same for every lender. Some banks have established a process for accepting non-customer PPP applications for the second round, such as starting a deposit account for non-customers.




Is there a deadline to apply for forgiveness?


The deadline to apply for forgiveness is the maturity date of the loan which could be 2 years if the loan approval date of June 6th or before and 5 years after June 6th.




Can businesses without employees apply?


If they are a sole proprietor with no employees, they can reference Line 31 of their Schedule C. If there is no income listed on their Schedule C, they would qualify, but for a zero amount.




Is it officially time to apply for loan forgiveness from our first draw?


The deadline to apply for forgiveness is the maturity date of the loan which could be 2 years if the loan approval date of June 6th or before and 5 years after June 6th.




The requirement for demonstrating a 25% decrease in revenue is not clear to me.  How do you define the periods for the decrease and what is the format?  Is this a part of the SBA application form?


This applies to 2nd draw PPP. A borrower is generally eligible for a Second Draw PPP Loan if the borrower: previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses; has no more than 300 employees; and can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. A calendar year-to-year comparison (2020 vs. 2019) may also be used.




Does the second draw have to be in a different quarter than was used for last year's PPP?


Paycheck Protection Program Second Draw Loans: Overview (sbgov)




If I have not submitted my forgiveness documents from the first draw yet, can I still apply for the second draw?


If you have an existing PPP loan from the first draw, you can still apply for the second draw.




If I am a barber who pays a barber shop booth rental, am I considered an independent contractor? Can the owner of the shop claim me as an independent contractor when there is no payroll involved?


Generally, barbers who rent a booth in a shop are considered self-employed. The barbershop or salon owner cannot claim you in their PPP application because you are not their employee. The barbershop owner who rents the booth typically does not issue a 1099 to the self-employed barbers because he / she is not collecting fees for services rendered and paying the barbers for contracted services. They are only leased / rented space. The self-employed barbers should be tabulating their receipts as sole proprietors and would only receive 1099s tax documents from business customers who pay them $600 or more in a tax year for services rendered. A tax professional should be consulted for any uncertainties.




Should we use 2019 tax returns? If not, what are we using as documentation to apply since we have not filed our 2020 tax returns?


Yes, you may use your 2019 tax returns.




Can an independent contractor with no EIN number, still apply for the PPP?


Independent contractors without an EIN will use their social security number.




Is this program open for non-profits?


Yes.





Greater Cincinnati Regeneration Alliance PPP Resource 

The Greater Cincinnati Regeneration Alliance, or the GCRA, is a group of local public, private and civic leaders who want to accelerate our community’s recovery from the impacts of COVID-19. Specifically, the GCRA is focused on accelerating recovery from the pandemic In Hamilton County neighborhoods and neighborhood business districts (NBDs), with a particular focus on Black, Brown and women-owned business by breaking break down silos and building capacity in small business and community development ecosystems

The Founding GCRA organizations are: The Carol Ann and Ralph V. Haile Jr. Foundation, Fifth Third Bank, The Port, the Urban League of Greater Southwest Ohio, and the Cincinnati Development Fund. Small business and community development organizations who share this mission as invited to participate because …

The Cincinnati community is coming together to assist in business recovery from COVID-19.

Contact CincinnatiRegenerationAlliance@gmail.com for more information.