5 Ways to Meet Second PPP Loan 2 Revenue Reduction Requirement Rule [Formula & Example]

Business that want to apply for the PPP Second Draw Loan need to follow the 25% reduction in revenue rule. PPP 2.0 revenue reduction rules provide 5 ways to demonstrate this, and in this video we show you the formula and example of how to calculate your revenue reduction percentage in order to be eligible to get second round PPP 2 loan.

Visit our website - https://freedomtaxaccounting.com/

Email us at [email protected]

DISCLAIMER
This video is intended for education purposes and should not be taken as legal or tax advice. You should consult with your financial professionals about your unique financial situation before acting on anything discussed in these videos. Freedomtax Accounting and Multiservices Inc. is providing educational content to help small business owners become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience. Freedomtax Accounting and Multiservices Inc. or its members cannot be held liable for any use or misuse of this content.

ABOUT
For business that want to apply for the second PPP loan it must certify that it has realized a reduction in gross receipts in excess of 25% relative to the relevant comparison time period. For PPP 2 loans greater than $150,000, Applicant has provided documentation to the lender substantiating the decline in gross receipts. For second round PPP 2.0 loans of $150,000 or less, Applicant will provide documentation substantiating the decline in gross receipts upon or before seeking PPP second draw loan forgiveness for the Second Draw Paycheck Protection Program Loan or upon SBA request.

For all PPP 2 loans, the appropriate reference quarter depends on how long the Applicant has been in operation:

• For all entities other than those satisfying the conditions set forth below, Applicants must demonstrate that gross receipts in any quarter of 2020 were at least 25% lower than the same quarter of 2019. Alternatively, Applicants may compare annual gross receipts in 2020 with annual gross receipts in 2019; Applicants choosing to use annual gross receipts must enter “Annual” in the 2020 Quarter and Reference Quarter fields and, as required documentation, must submit copies of annual tax forms substantiating the annual gross receipts reduction.

• For entities not in business during the first and second quarters of 2019 but in operation during the third and fourth quarters of 2019, Applicants must demonstrate that gross receipts in any quarter of 2020 were at least 25% lower than either the third or fourth quarters of 2019.

• For entities not in business during the first, second, and third quarters of 2019 but in operation during the fourth quarter of 2019, Applicants must demonstrate that gross receipts in any quarter of 2020 were at least 25% lower than the fourth quarter of 2019.

• For entities not in business during 2019 but in operation on February 15, 2020, Applicants must demonstrate that gross receipts in the second, third, or fourth quarter of 2020 were at least 25% lower than the first quarter of 2020.

#ppp2 #pppseconddraw #ppploan2 #ppp2revenuereduction #secondppploan