How Your Business Can Use PPP-2 Loans and Qualify for Forgiveness
The second round of Paycheck Protection Program (PPP-2) loans are about to roll out. If you’re planning to apply, it’s important to understand that the federal government has made some changes to the requirements for this round.
In order to qualify for a PPP-2 loan, your business must:
- Have spent all of your first PPP loan money before applying for a PPP-2 loan
- Have fewer than 300 employees per location
- Demonstrate “proof of hardship,” which consists of at least a 25% reduction in gross revenue in 2020 compared to 2019
PPP-2 loan applications are being accepted from January 19 through March 31. If you’d like to take advantage of this opportunity, it’s crucial that you begin the application process right away to ensure you don’t miss the deadline.
Criteria for Getting Your PPP-2 Loan Forgiven
You may be eligible for loan forgiveness if you meet the following criteria:
- At least 60% of the funds are spent on payroll
- You maintain the same number of full-time employees during your “covered period” (8-24 weeks) and pay them at least 75% of their typical salary
- The remaining 40% of your loan is spent on “eligible costs”
The “eligible costs” that will qualify for loan forgiveness include:
- Covered mortgage interest
- Worker protection and facility modification expenses, including PPE, improved office ventilation systems and onsite health screenings
- Property damage costs associated with public disturbances in 2020 that weren’t covered by insurance or reimbursed in some other manner
- Expenditures to suppliers that are essential to your current operations
- Operating expenditures associated with business software or cloud computing services
This is a significant change from the first round of PPP loans. You’ll now be able to spend up to 40% of your PPP-2 money on technology expenses associated with keeping your business going and still receive loan forgiveness. This might include:
- Accounting software
- Monthly subscriptions to cloud software
- Payroll processing and tracking software
- Sales and billing software
As long as you’re able to demonstrate that your 40% of allowable expenses beyond payroll are necessary for your company to be successful, you should be able to qualify for loan forgiveness.
Upgrade to a NetSuite ERP System with Your PPP-2 Loan Money
Cloud computing services such as an enterprise resource planning (ERP) system provide tremendous benefits to your business, allowing you to automate many aspects of your operations. This can simplify your processes and reduce your overall costs. By using 40% of your PPP-2 loan to fund your ERP system, you can make a serious upgrade to your technology with a minimal expenditure of your own financial resources.
NetSuite has become the leading ERP system on the market. This cloud-based solution will allow you to:
- More effectively manage IT-related costs
- Improve operational workflow
- More effectively address information and reporting demands
- Improve employee productivity
Your business will experience a variety of important benefits from using NetSuite, including:
- Ability to scale your software to address future company growth
- Integrates a variety of applications into one single data and reporting model
- Ability to address new functionality needs as they arise over time
In addition, the software will manage a variety of important applications, including:
- Financial management
- Financial planning
- Order management
- Production management
- Supply chain
- Human capital management
- Warehouse fulfillment
- Business intelligence
NetSuite provides an ideal solution for small to mid-sized businesses. Eliminate the use of multiple platforms and streamline the way you gather your data and run your business. By keeping all of your data on the cloud, you avoid the need for ongoing upgrades and eliminate IT hassles.
Prophet One Can Help You Get the Most Out of Your ERP System
Maximizing your ROI on an ERP system such as NetSuite can be challenging. Installation and setup are complicated, and ongoing management of your business applications takes a bit of savvy. At Prophet One, we have the experience necessary to help you implement your new ERP system. We’ll create a roadmap that allows you to harness the full power of NetSuite in a way that maximizes your results and boosts profits.
We’ve created our exclusive Client First Integration™ Approach to help you achieve better outcomes. We accomplish this by:
- Listening and understanding your specific business challenges
- Clearly understanding your current technology environment
- Outlining your unique desired project outcomes
- Creating a custom solution to meet these desired outcomes
- Working with your team to effectively implement your new system
- Collaborating with you to ensure there are no surprises
- Continuing to measure results and make adjustments that provide you with a competitive advantage now and into the future
Our top priority is to provide the smart tools and systems that will allow you to make your business more successful. This is why your unique needs will drive the solutions we create for your business. By building a lasting relationship with you, we’ll help ensure your new system not only meets your current needs, but accommodates the directions your company takes as it grows over time.
Please contact us today to schedule a consultation.